Government’s flagship programme, the Free SHS policy, keeps causing trouble and distress to everyone: government, policy think-tanks, academia, educationists – and even some parents.
It is a policy that will either make or unmake this government.
Government, which formulated the policy, has admitted to the burden cost of implementing the policy is having on its expenditure.
The only population excited by the policy are parents, and even among those, some (mainly the middle-class and well-to-do) have claimed they would have preferred to pay for their wards’ school fees.
So the Free SHS policy, which by far is arguably the current government’s biggest social intervention programme, is a bother to many and has become a costly and painful policy to execute.
On Tuesday the Institute of Statistical, Social and Economic Research (ISSER) of the University of Ghana reignited the debate on Free SHS, arguing that the policy’s cost is so high it would have been better to have targetted it at the poor in the face of shortfalls in government’s revenue.
So, yes, the Free SHS could have been better targetted. In my mind, government could have simply decided that if you send your child to a gov’t-funded Junior High School (JHS) it means you are poor and qualify for Free SHS. On the other hand, if you sent your ward to a private JHS you don’t qualify. Pure and simple.
This would have helped the state to make some savings on implementing the policy.
Failing to target the policy does not however mean that the mass roll-out is the worst that could have happened to government’s purse.
Indeed, implementation of the Free SHS policy in its current state, regardless of the cost, is best for everyone.
Firstly, the Free SHS has lessend the financial burden in no small way on many parents who hitherto would have had to shoulder the cost of secondary education for their wards. Of course, the cost of education is expensive and it is the responsibility of every parent to fund their wards’ education. But it shouldn’t be lost on people’s minds that in Ghana, of the about-10 million working population, only some 15% pay direct taxes, according figures from the Ghana Revenue Authority.
So, even for those who are in a position to pay their wards’ school fees and are at the same time burdened with a lot of taxes, the policy has brought some relief to them.
More so, with challenges in the economy and loss of jobs for a large number of people, the Free SHS couldn’t have come at a better time. So, those workers who prior to clean-up of the financial services sector were in a position to pay for their wards’ fees and suddenly lost their jobs and income are now in a vulnerable position, and would have had to struggle in fulfilling their responsibilities if implementation of the policy had cut them out because of targeting.
ISSER and others that advocate targetting of the policy often harp on the cost element to advance their arguments. Simply looking at the cost will make you want government to reconsider the Free SHS in its current form. But in the larger scheme of government’s programme and on the basis of cost-benefit analysis, the cost of Free SHS is ‘insignificant’ and is not the reason government is unable to increase its capital expenditure – which has been declining over the years and prior to implementation of the Free SHS.
In fact, the cost of the Free SHS has only become an excuse for government not to do what it ought to do and for the governed to hold government accountable.
Estimates by government suggest the state will need about GH¢1.6billion a year to fund Free SHS. To institutions like ISSER and others, this amount could have been spent on other capital projects like roads if the policy had been targetted. While they may have a point, they have failed to recognise that there are other policies and programmes implemented by government which cost the nation hugely but benefit a few.
For instance, in 2018 the tax exemptions in respect to import duty, import VAT, import NHIL and domestic VAT jumped to GH¢4.6billion – representing 1.6 percent of GDP in 2018. These figures do not include exemptions from the payment of corporate and individual income taxes, concessions on tax rates, petroleum tax reliefs, Customs tax exemptions enjoyed by diplomatic missions and waivers of processing charges at the ports.
In total, tax exemptions are estimated to have cost the country more than US$2.4billion in 2018, which represents more than 4 percent of the country’s GDP. President Nana Addo Dankwa Akufo-Addo, in his state of the nation address earlier this year, described tax exemptions as an Achilles heel and a growing menace.
So, in comparison, the cost to the nation from tax exemptions dwarfs that of the Free SHS.
Again, interest payments alone for this year have been budgeted at GH¢18.6billion.
There are other costs and inefficiencies in the system that when contained will free money to fund Free SHS, which is needed for a country aiming to educate and increase the capacity of its citizens.
The rollout of Free SHS for all may be costly, but results of the cost-benefit analysis mean that it is an investment worth pursuing.
If there are concerns about government’s inability to meet its revenue target, the country should look to address that. The Free SHS in its current implementation stage should not become the easiest target or the trouble-child to blame for failure of the state/government to meet its other obligations.
There are other cost items which benefit only a few individuals and institutions yet hit governments’ purse harder than the cost of Free SHS – and those are the ones that should trouble government and its stakeholders.