Ghana’s economy, once hailed for its robust growth and potential, faces significant challenges marked by a slowing growth rate, rising debt, and inflation pressures. Amid these economic strains, the imposition of increased taxes and the introduction of new ones have sparked a nationwide debate. Critics argue that such fiscal measures are not only retrogressive but also counterproductive to economic rejuvenation. Instead, a more sustainable and inclusive approach involves reducing the cost of doing business and addressing the high standard of living that burdens the average Ghanaian.
The Burden of Increased Taxes
Increasing taxes in an already strained economic environment can stifle growth, deter investment, and place an undue burden on both businesses and consumers. For businesses, especially small and medium-sized enterprises (SMEs) that form the backbone of Ghana’s economy, higher taxes mean increased operational costs, reduced profitability, and less capital for reinvestment and expansion. For consumers, it translates to higher prices for goods and services, reducing their purchasing power and overall quality of life.
The ripple effect of increased taxation can exacerbate the challenges of a decaying economy, leading to job losses, reduced consumer spending, and a decline in overall economic activity. Such measures, while providing a short-term boost to government revenues, fail to address the underlying structural issues plaguing the economy.
Reducing the Cost of Doing Business
Revitalizing Ghana’s economy requires a strategic shift towards policies that reduce the cost of doing business. This involves a holistic approach, including regulatory reforms to streamline business registration and compliance processes, making it easier and less costly for new and existing businesses to operate. Enhancing infrastructure, such as roads, electricity, and digital connectivity, can also significantly reduce operational costs and improve efficiency.
Furthermore, providing tax incentives and financial support for key sectors can spur innovation and growth. Sectors such as agriculture, manufacturing, and technology have the potential to drive economic diversification, create jobs, and increase exports. Supporting these sectors through targeted policies can lay the foundation for a more resilient and dynamic economy.
Addressing the High Standard of Living
The high standard of living in Ghana, characterized by rising costs of housing, increasing electricity charges, healthcare, education, and basic services, places a significant strain on households. Tackling these issues requires comprehensive policy measures aimed at increasing affordability and accessibility. This includes investing in affordable housing, removing taxes on utilities, improving healthcare and educational facilities, and subsidizing essential services for vulnerable populations.
Moreover, implementing policies to increase wages and create more high-paying jobs can help bridge the gap between the cost of living and income levels. Encouraging the development of local industries and promoting “Made in Ghana” products can also reduce reliance on imports, stabilize prices, and keep money within the local economy.
Salvaging Ghana’s decaying economy demands innovative solutions, such as the 24Hour Economic Policy, beyond the traditional approach of increasing taxes.
By focusing on reducing the cost of doing business and addressing the high standard of living, Ghana can create a more conducive environment for economic growth and development.
These measures, coupled with a commitment to good governance, transparency, and fiscal responsibility, can set Ghana on a path to economic recovery and long-term prosperity.
As Ghana brainstorm these challenging economic times, the need for policies that uplift rather than burden its citizens has never been more critical.
Enyonam Apetorgbor
CEO, Keta Investment Promotion Center.
