Ghana: Plucking a featherless chicken
Posted by By Akogun Akomolafe at 21 October, at 11 : 57 AM Print
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From My Archives: Ghana: Plucking a featherless chicken
“The government is expanding to meet the needs of an expanding government.” – Graffiti
“You do not pluck a featherless chicken.” – African proverb.
In the article ‘Sitting on Gold and looking for money in condom,’ http://alaye.biz/2013/07/sitting-on-gold-and-looking-for-money-in-condom-taxes/ we lamented the poverty of vision that led the government to think of levying taxes on condoms, yes, common condom.
We wrote, inter alia, “Like the simple issue that it is grossly insulting, even alarming, that we do not have the men and the women in our government that are capable of thinking outside the box. From Tarkwa in the Western to Wa in the Upper West Region, Ghana sits literally and figuratively on gold. And gold is just one of the innumerable minerals under our soil. We have abundant Manganese, salt, bauxite, iron ore, and other minerals. And we have recently joined the ranks of oil-producing nations. Why on earth are we then so bereft of creative ideas that we could only think of making money from condoms!
“Sorry, Femi, but it is exactly those types of jejune arguments that have kept us where we are today. And you and I know that we are solidly at the bottom, at the rung of every measure we use to measure human progress. It is exactly our lack of capacity to think big; our inability to be audacious that is the bane of our lack of progress. It pains me greatly that I live in a country, so richly blessed and yet have leaders sitting down to consider options and all they could come up with are ways and how to raise money from taxing condoms. Our ambitions should be made of sterner stuff, to quote Shakespeare. Tchaah!”
In the month of September, the Public Utility Regulatory Commission (PURC) announced a whopping 78.9% (yes, you read it right, seventy-eight point nine percent) increase in electricity tariff. Water was also increased by over 50 percent.
I don’t know who advised the government on such things, but the increment in prices at such mammoth rate is not only senseless, it is as short-sighted as it is self-defeating.
Except for very few righteous among us, few people like to pay taxes.
Agitation against taxes has led to wars, revolts, and revolutions. That explains why governments are very careful when they introduce or increase taxes.
Which makes it difficult to understand why the government chose that wicked path.
For one thing, such monstrous increment at a go (as we say in GH) show an obvious lack of foresight and poverty of planning.
The argument that without massive increment, provision of services will ground to halt is untenable; it only shows that managers have been asleep on the job.
Good management practice requires that managers have short, medium and long-term strategies to cope with eventualities.
Except for the rented-mouths of the government or of the ruling party, every other person in our blessed republic knows that things are hard, very hard in the country.
It is difficult to imagine the last time, after the debacles of the 1970s and the 1980s, when things were this tough in Ghana.
There is gnashing of teeth in the land, occasioned by severe lack of cash for both industrial and personal consumption. The cost of living is literally and figuratively killing the people.
No less a personage than the President himself admitted that we have bitten off all the juicy meat and are left with bare bones.
There is widespread unemployment (never mind the statistics government spin-doctors spew out about the imaginary jobs they created on their spreadsheets).
Industrial production is low, with many companies trying to cut cost by retrenching workers. The mines are laying off workers.
The banks are in bad shape as government borrowing left the money supply in dire straits. Every financial institution in the land today complain of serious illiquidity and many are in distress. Many of them complain of low savings and heavy withdrawal, and there have been attacks on some financial houses by irate customers who cannot gain access to their money.
We should add that, given the bad economic outlook, it makes little sense to keep cash in the bank only for it to be eaten by inflation.
And are these the same companies that government is saddling with monstrous electricity tariffs?
Simple logic suggests that they will only lay off more workers, thereby increasing the rate of unemployment and reducing the number of people that pay taxes.
With few jobs available and fewer being created, sensible economics suggest that government should be thinking about how to stimulate the economy. And you don’t boost economies by raising taxes, as it is the most serious disincentive to personal and corporate investment.
We are told that government borrowing has skyrocketed to historic levels.
While Government tells us that the loans have been put into serious investments that will soon yield dividends; opponents argued that the loans have all disappeared into corruption heaven. We will never know as both government and opposition are not noted for telling us the truth.
So, now we have a situation where there is little productive venture to yield desired taxes for the government.
What to do?
Unfortunately, rather for the managers of the economy to sit down and think deep about creative ways to improve productivity, they met and decided on the easiest way available.
They chose to increase taxes.
As we mentioned in the article referred to above, there is nothing wrong with governments employing their sovereign powers to impose taxes, but good economy and simple common sense dictate that this should be done so as not to kill the hen that lay the eggs.
This becomes doubly troubling when governments appear to think only of taxation as means of increasing revenue.
We should not tax people beyond the limits of their abilities to pay. This is not only economically dangerous, but the political and social implications are also things to seriously worry about.
We are pained however that the managers of our economy appear not to realize the enormous damage they do to the economy, by their one-track mindset of exponentially increasing taxes, as the only means of generating revenue.
It is like shooting oneself in the foot.
For example, we have the situation whereby our officials proclaimed loudly the desire to make Ghana the Gateway to West Africa.
A laudable idea by any measure.
But then they proceeded to shoot themselves in the mouth, by making Ghana ports the most expensive in the sub-region.
Can you beat that!
Why do our officials forget that we cannot dream or talk our way into prosperity; we have to plan for it?
Why do they behave like our neighbours are fast asleep have no ambition to collar the same business or the same direct investment that we are after?
We cannot dream to make Ghana the Gateway when we make it so expensive to do business in Ghana.
Our Togolese brethren already operates a free port. Which means that you pay token administrative fees to get your goods out of the port in Lome.
It cost three times as much to clear a car of the same model/year in Tema than in Apapa or Tin can Island in Lagos, Nigeria.
And we talk of Ghana as a Gateway!
Why are our leaders so myopic that simple business sense seems to escape them?
It’s volume, stupid.
Every alata seller in the market knows that you make more money by charging less from many customers, than trying to milk maximum profit from a few clients. I don’t know why this simple logic escapes our officials who brandish every manner of university degrees.
I have experienced both the expense and the anguish of clearing goods from the Tema port. There, I saw how containers laden with every description of disused junks from Asia or Europe or America pay a pittance to get cleared, while those of us that brought useful things are made to go through pure hell.
I understand that many of the items in these containers are on the banned-lists, yet they get cleared from our ports with ease, and they end up polluting our environment and giving our folks serious, debilitating ailments.
What happens is that when governments become too greedy, the result is that people look for creative ways to beat the system, with the government ending up the loser. The result is massive corruption and the only people that benefit are corrupt officials.
The late president Mills cried himself hoarse at the Tema port where he went to lament the high level of corruption. His appeal for patriotism went unheeded.
A newspaper recently carried a comprehensive report on the extent of corruption at our ports. It was reported how people shunned our ports, send and clear their goods and cars at Togo and find the ways and means (another of our fanciful expressions) to bring them into the system.
No, it is not limited to the small guys as another paper went to town to show how Customs officials collude with big-time importers to auction off sales of goods seized because the owners cannot pay. The paper showed that most often the seized goods are sold to the same importers at less cost than what the government demanded.
So the importer and the customer officials laugh all the way to their banks, while the government receives nothing.
Where is the sense in this?
The reports made very shocking readings, and the greatest surprise is that the government has taken no action to date.
Before we jump up to condemn, we should pause to ask what sense is there in asking someone to pay three times in import duties what it cost to purchase the car.
No, we do not talk of over-aged cars. We talk about commercial buses that could aid in transporting people and goods.
Maybe those officials know what they are doing by creating unnecessary snafus. After all, they get their cut to maintain their lavish lifestyles, and who cares if the state loses out.
Our lives will improve vastly in this country when more and more of us began to seriously question how things are run by our officials.
A good example is the wage bill that today threaten to bankrupt the nation. How on earth did we allow civil servants to increase the portion allocated to wage bill in our budget from thirty to about seventy percent? Why did we allow the 700 or so thousand civil servants we have running the machinery of government to get over seventy percent of the national cake? How do we intend to build a modern Ghana when we expend seventy percent of our budget on salaries alone?
With all the whopping amount paid, there is no discernible change in the level of corruption from our public officials. The ongoing at the Sole Commissioner on Judgment debt makes sober readings.
Rather than for the government to bring its wage bill to sustainable levels and plug all the massive loopholes in the system; it rather would go borrowing and increase taxes and tariffs to unbearable levels.
Patriotism anyone?
PS: It looks like citizens are borrowing a leaf from our government way of doing business. When I asked my neighbor, who ran our local store, why she raised her prices, with a straight face she told me, “I have to increase my price because people are not buying.”
It was one of those things that leave you totally flummoxed and renders you speechless.
About the Author
Femi Akomolafe is a passionate Pan-Africanist. A columnist for the Accra-based Daily Dispatch newspaper and ModernGhana, and Correspondent for the New African magazine. Femi lives in both Europe and Africa and writes regularly on Africa-related issues for various newspapers and magazines.
Femi was the producer of the FOCUS ON AFRICANS TV Interview programme for the MultiTV Station.
He is also the CEO of Alaye Dot Biz Limited Dot Biz, a Kasoa-based Multimedia organisation that specialises in Audio and Video Production. He loves to shoot and edit video documentaries.
His highly-acclaimed books (“Africa: Destroyed by the gods,” “Africa: It shall be well,” “18 African Fables & Moonlight Stories” and “Ghana: Basic Facts + More”) are now available for sales at the following bookshops/offices:
- Freedom Bookshop, near Apollo Theatre, Accra.
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Africa: it shall be well
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Africa: Destroyed by the gods
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Comradely,
Femi Akomolafe
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