If government wants to have some fiscal space and get revenue to finance its projects, then it must review its Free SHS social intervention programme to target those who need it, an economist at the University of Ghana, Dr. Ebo Turkson, has said.
Speaking to the B&FT ahead of the mid-year budget review to be presented today in parliament by the Finance Minsiter, Ken Ofori-Atta, of which shortfall in government’s revenue has dominated discussions, Dr. Turkson argues that, even though the Free SHS policy is a laudable one, there is a need to discriminate its beneficiaries in order to provide some fiscal space for government.
“If we can do something about the Free SHS in terms of the targeting of the policy— that is if we allow those who can pay to pay— it will free some fiscal space for the government. I know there are many parents who can pay for the education of their children in the secondary schools.
It is a good policy; we want everybody to go to the secondary school; but we also know there are scores of parents who can afford to pay so we must discriminate and give the Free SHS to those who can’t afford to pay in the meantime,” he said.
He further stated that government can target those who really need the intervention using the primary school where students had their education as the basis for selecting beneficiaries.
“There is a very good way of discriminating. Thus, we can look at where the kids come from— from the basic level. For example, if I sent my child to GIS and I paid US$2000 per year, I don’t think taking my child to the secondary school and paying about GH¢500 a term will be a problem for me as a parent.
And if that will mean I pay a little more so that the quality of tuition and living conditions on secondary school campuses will improve for my kid, I would be encouraged and prepared to pay for it,” he said.
“So the Free SHS is a very good concept—one of the best that has happened to this country—but a second look must be taken at it. I think the policy was rushed through.
We could have done that in phases by first discriminating and then once we are able to collect enough tax revenues (after the tax measures including widening the tax net to include the informal sector, putting systems in place to ensure compliance, and increasing and aggressively pursuing taxes and levies such as property rates, road tolls and vehicle licensing and road worthy fees as well as punitive taxes) then we can make the SHS free for all,” he added.
The NPP government, since its ascension to power, has battled with revenue mobilisation owing to some taxes it termed ‘nuisance’ which were scrapped in its first year of administration. This move has denied government about a billion cedis in revenue.
Last year, government was forced to cut its expenditure to keep its budget on track as it saw revenue decline significantly.
Total Revenue and Grants for between January to September last year amounted to GH¢28.4 billion, equivalent to 14.1 percent of GDP compared to a target of GH¢31.3 billion (15.5% of GDP), representing 9.3 percent below the target.
Meanwhile, government has targeted GH¢51 billion revenue for 2018.