By Korsi DZOKOTO
Ghana is currently facing one of its most severe economic crises under the Fourth Republic, marked by an unprecedented default on debt obligations, a crippling debt restructuring program, and widespread economic hardships.
From soaring inflation, particularly in food prices, to high unemployment rates, low productivity, and a deteriorating standard of living, many Ghanaians are grappling with economic challenges that seem insurmountable.
The current state of the economy is a result of poor management, unsustainable debt levels, and a lack of vision from the Akufo-Addo-Bawumia administration. As the country moves toward the 2024 general election, John D. Mahama’s proposed policies offer a ray of hope, focusing on macroeconomic stability, fiscal sustainability, and long-term economic growth.
Mahama’s vision is not just about stabilizing the economy but fundamentally transforming it. Through targeted interventions and reforms, his plan aims to reset Ghana’s economic trajectory and improve the lives of ordinary Ghanaians by reducing the high cost of living, creating jobs, and ensuring fiscal discipline.
Here is a closer look at how Mahama’s manifesto promises will make significant changes to the lives of Ghanaians.
Immediate alleviation of financial hardships
Mahama’s pledge to scrap draconian taxes like the E-levy, COVID-19 levy, 10% levy on bet winnings, emissions levy and import duties on vehicles and equipment for industrial and agricultural purposes within the first 100 days of his administration is a critical step toward easing the financial burdens on Ghanaians.
The removal of these taxes will immediately reduce the cost of doing business, lower the prices of goods and services, and make life more affordable for ordinary citizens.
For instance, scrapping the E-levy (Electronic Transfer Levy) will be particularly impactful, as it has added an additional layer of cost to digital transactions, which are now essential for business operations and personal financial management.
By removing this levy, Mahama’s administration will encourage more people to participate in the digital economy, fostering growth in the fintech sector and reducing the financial pressure on households that rely on mobile money services.
Stabilizing the macro economy and currency
A key component of Mahama’s economic recovery plan is to stabilize the national currency and the macroeconomy. The rapid depreciation of the cedi under the current administration has contributed to the high cost of imports, which has exacerbated inflation, particularly in food prices.
By implementing an urgent economic recovery program aimed at shoring up foreign reserves, Mahama’s administration will work to halt the cedi’s decline, thereby stabilizing prices and reducing inflation.
A stable currency is critical for restoring investor confidence and curbing capital flight, both of which are necessary for driving economic growth. With a stabilized cedi, Ghana can attract more foreign direct investments (FDIs) and support local businesses, helping to create jobs and boost economic activity.
Boosting agriculture for economic transformation
One of the most transformative aspects of Mahama’s plan is the Economic Transformation Agenda (ETA), which focuses on promoting modernized agriculture, agribusiness, and value addition.
By prioritizing agriculture as a key pillar for import substitution, exports, and job creation, Mahama’s administration will reduce the country’s over-reliance on food imports and high import expenditures. This will have a direct impact on reducing food inflation, making it easier for Ghanaians to afford basic necessities like rice, maize, and vegetables.
The focus on value addition in agriculture will also create new economic opportunities for farmers, agro-processors, and exporters. By investing in modern technologies, irrigation, and storage facilities, the NDC government will help farmers increase their productivity and profitability. This shift from exporting raw materials to processed goods will not only create jobs but also improve Ghana’s trade balance, contributing to long-term economic stability.
Fiscal Responsibility and Waste Reduction
Under the current administration, Ghana’s fiscal situation has been characterized by significant waste, inefficiency, and financial losses. Mahama’s manifesto includes a strong commitment to reviewing and enforcing the Fiscal Responsibility Act, 2018 (Act 982) and implementing a Fiscal Consolidation Plan. By doing so, his administration will ensure that public finances are managed prudently, reducing deficits and preventing excessive borrowing.
In addition, Mahama plans to establish an Independent Fiscal Council (IFC) to oversee government spending and ensure that fiscal policies are adhered to. This will instil discipline in public financial management and prevent the kind of reckless spending that has contributed to the current crisis.
A more disciplined fiscal policy will free up resources for investment in critical areas such as healthcare, education, and infrastructure, improving the overall quality of life for Ghanaians.
Leveraging Technology for Efficient Governance
In an era where technology is transforming economies, Mahama’s plan to leverage new technologies, including Artificial Intelligence (AI), is forward-thinking and timely. By using AI and other digital tools, the NDC government will create more transparent, responsive, and efficient fiscal management systems. This will enhance the government’s ability to track spending, reduce corruption, and improve service delivery.
Incorporating blockchain technology, for example, can improve the transparency of public transactions, reduce fraud in public procurement processes, and ensure that government resources are directed toward their intended purposes. The use of digital tools in governance will not only save money but also restore confidence in public institutions, which is critical for national development.
Supporting the Most Vulnerable
Mahama’s manifesto recognizes the need for social interventions to protect the poor and vulnerable. By introducing targeted measures to alleviate economic hardships, such as subsidies for essential goods and services, the next NDC administration will ensure that the most disadvantaged groups in society are not left behind.
These interventions will provide a safety net for families struggling with the high cost of living, particularly in rural areas where poverty levels are higher. By focusing on inclusive growth, Mahama’s plan will create opportunities for all Ghanaians, regardless of their socio-economic status.
Shifting Focus from the Macro-Economy to the Micro-Economy
One of the unique aspects of Mahama’s economic reset is the strategic shift from an overemphasis on macroeconomic indicators to prioritizing the micro-economy. While macroeconomic stability—such as maintaining a stable currency and balanced budgets—is crucial, it is often the micro-economy that directly impacts the lives of everyday Ghanaians.
Small businesses, local producers, artisans, and individual consumers are the heart of the micro-economy, and their success determines the overall well-being of the nation.
By investing in the real sector, particularly agriculture, manufacturing, and small-scale industries, Mahama’s administration seeks to create sustainable jobs and boost domestic production.
This approach will not only enhance economic resilience by reducing reliance on imports but also increase the incomes of individuals and households. For example, local entrepreneurs will benefit from better access to credit, improved infrastructure, and policies that support value addition, making them more competitive in both domestic and international markets.
Prioritizing the micro-economy also fosters inclusive growth, ensuring that economic benefits are shared across all regions and sectors of society. It addresses regional disparities in development and offers economic opportunities to groups often marginalized in the current economic structure, such as women, youth, and informal sector workers.
This people-centred approach to economic growth will have a tangible impact on poverty reduction, improving standards of living, and enhancing economic equity.
Comprehensive VAT Reform for Households and Businesses
Another crucial policy in Mahama’s economic reset plan is the comprehensive reform of Ghana’s Value-Added Tax (VAT) regime. VAT has long been a burden on businesses, especially small and medium-sized enterprises (SMEs), as well as households struggling with high living costs. The current VAT system, with its complex rates and exemptions, creates inefficiencies and contributes to the rising cost of goods and services.
Mahama’s administration plans to streamline and simplify the VAT structure, providing relief to both households and businesses. This reform will lower the tax burden on consumers, particularly for essential goods such as food and utilities, thereby reducing the cost of living.
For businesses, a more straightforward VAT regime will make compliance easier, reduce operational costs, and improve cash flow. These reforms will help stimulate economic activity by allowing businesses to reinvest savings into expanding operations, hiring more staff, and innovating new products and services.
By making VAT more equitable, the NDC government can boost domestic demand, stimulate local production, and improve the overall business environment, fostering growth across sectors.
Implementing a Transparent Framework for Fiscal Management
A cornerstone of Mahama’s approach to restoring fiscal stability is the implementation of a more robust and transparent framework for fiscal management. The NDC government will re-engage with the International Monetary Fund (IMF) to complete the current program, ensuring that Ghana stays on a path of fiscal discipline and debt sustainability. However, unlike previous IMF programs that have often led to austerity measures, Mahama’s approach focuses on balancing fiscal consolidation with growth-promoting investments.
The establishment of an Independent Fiscal Council (IFC) will be critical in enforcing fiscal discipline. This independent body will oversee government spending, ensure that fiscal targets are met, and provide checks on wasteful and excessive expenditures. By creating a transparent and accountable fiscal environment, Mahama’s administration will restore confidence in Ghana’s economic governance, which is essential for attracting both domestic and foreign investment.
Moreover, Mahama’s fiscal policy framework aims to cut down on wasteful government spending, reduce corruption, and enhance the efficiency of public service delivery. This will not only result in significant cost savings but also improve the overall quality of government services in areas such as healthcare, education, and infrastructure.
Leveraging Technology for Efficient Fiscal Management
As part of the effort to modernize fiscal management, Mahama plans to leverage new technologies, including Artificial Intelligence (AI) and blockchain, to enhance the transparency and efficiency of Ghana’s financial systems. The application of AI in areas like tax collection, financial reporting, and public procurement will improve accuracy, reduce the risk of fraud, and help the government to maximize revenue generation while minimizing leakages.
The use of blockchain technology can ensure that public finances are handled with the highest level of integrity and transparency. For instance, blockchain can be used to track public funds in real time, reduce bureaucratic inefficiencies, and guarantee that government contracts and payments are processed fairly. This level of technological innovation in public finance will go a long way in restoring public trust and enhancing the efficiency of fiscal operations.
By integrating these modern technologies into the management of public finances, Mahama’s administration will create a more responsive and transparent government, which will ultimately result in better resource allocation and improved service delivery to the Ghanaian people.
Social interventions for the poor and vulnerable
In recognition of the fact that economic crises disproportionately affect the poor and vulnerable, Mahama’s manifesto includes several social intervention measures designed to provide relief to those most in need.
His administration will introduce targeted subsidies for essential goods and services, ensuring that the most disadvantaged members of society are protected from the harshest effects of the economic downturn.
These interventions will include direct support for low-income families, ensuring access to affordable healthcare, education, and food security. By focusing on protecting the poor, Mahama’s government will address the rising inequality in the country and ensure that economic recovery does not leave anyone behind.
Conclusion
Mahama’s economic reset plan presents a holistic approach to addressing Ghana’s economic crisis. By scrapping punitive taxes, stabilizing the currency, reforming VAT, modernizing fiscal management, and prioritizing the micro-economy, Mahama’s manifesto offers concrete solutions that will bring immediate relief to Ghanaians while setting the stage for sustainable long-term growth.
Through targeted investments in agriculture, value addition, technology, and social protection, Mahama’s policies will revitalize the economy, create jobs, and improve the quality of life for all Ghanaians. This comprehensive reset will transform Ghana into a more resilient, equitable, and prosperous nation, positioning it for sustainable growth and economic inclusivity.
