The Senchi Economic Forum: More Observations
Although the Senchi Economic forum included revenue generation in its final memorandum, I think it needs to be given added prominence. Without significant internal revenue generation, any development programme would remain a wish list.
Advertisement
It is unacceptable that our national revenue are used to pay public servants. If we maintain the present methods of revenue collection, our current account balance will continue to be in the red for the foreseeable future.
To start with, we do not have significant numbers of prosperous businesses that would contribute enough tax revenue. Also, there is widespread unemployment. Therefore, raising the level of taxation on a population that is not earning much is a waste of time.
We have to explore other means of revenue generation. Ghana is oozing with resources that if mobilised, could deliver incomes that would make it unnecessary to rely on external funding for development. All we have to do is to challenge our technical people to deliver and they will. We live in a country where income generation openly beckons, but we refuse to take advantage.
In June 2012, I published an article on generating income for the country. I forwarded copies to the late P.V. Obeng of the National Development Planning Commission and to the Ministry of Finance. In it, I gave examples of how we could add to the national treasury and create jobs with minimum investment. I am willing to share the document with the forum organisers also.
As Ghanaians, we have been spoilt by the socialist ideology of thinking that we are entitled to free “everything”: Water, electricity, roads, hospitals, schools, etc. But we never stop to think of how these would be funded. We are not willing to work seriously to generate the necessary income to support these programmes.
The results are schools under trees, the “dumsor” or irregular power supply, unreliable water supply, etc. The government must get creative in linking these amenities to income generation so as to raise the necessary funds to make them available in the first place.
We must never borrow money to provide anything free or subsidised. Such money must be invested where it can create jobs and generate income to repay the loan. Even if it is in infrastructural development, that infrastructure must lead to income generation. Below is an example.
Other Trending Stories
Bauxite-Alumina Project
We have large deposits of bauxite (the raw material for making aluminium) at Kibi and Nyinahin in the Eastern Region. There have been numerous feasibility studies on these deposits by potential investors over the years, but to date, no development action has been taken. I have seen some of these studies and the main reason discouraging investors is the lack of infrastructure.
The mining of bauxite and its processing into alumina requires road and railway infrastructure, clean water supply and of course, power. If the investor has to provide all these before he can exploit the resource, then the rate of Return on the Investment (ROI) becomes unattractive compared to other competing destinations.
As a result, our bauxite has remained in the ground providing no jobs and no income. If the government borrows money to provide these facilities, the amenities would serve the people of the area, as well as facilitate the development of the bauxite which would generate income to pay for the investment.
Labour Productivity
Labour productivity in this country is woefully low, meanwhile labour expects unrealistically high remuneration. To effectively tackle this problem, tying remuneration levels to productivity is an excellent idea. Remuneration levels should no longer be fixed, but made to vary depending on the productivity targets achieved during the month.
When I operated a sandcrete block making factory a few years ago, my partner and I tried this method with great effect. The remuneration for labour was worked into the price of every good block produced.
At the end of the month, the number of good blocks produced was tallied, multiplied by the labour cash component per block and the resulting amount shared among workers. If for any reason there was no production on any day, then nothing was earned. On another hand, if there was record production during the month, whether all the blocks were sold or not, we paid labour for their effort.
The higher their productivity, the higher their earnings. It was a win-win situation with no labour disputes. Under this arrangement, workers police themselves to ensure that their earnings are not affected by poor performance. We must adopt such innovative ideas to help raise labour productivity in the country.
Building national consensus
The extreme polarisation of our society on political grounds means that we are unable to take advantage of the knowledge and skills of all Ghanaians. The absence of the New Patriotic Party(NPP) at the Senchi economic forum was unfortunate and underscores the point.
The Americans can afford to shut down their government for a while for political reasons, but we cannot afford that luxury. They are developed and running an affluent society, while we cannot even afford our basic needs. When they were at our level of development, they used every available knowledge and talent in their country and still do. We must therefore, make every effort to build national consensus on our journey to development.
I believe that the Senchi Economic Forum was an emergency meeting called at short notice to help solve our immediate economic problems. Longer term, however, I do not think that locking a few “wise men” in a room and asking them to evolve a magic wand is the best approach.
We must first solicit inputs from the public, then we can task a group of people to synthesise the ideas and select the best ones for implementation. The wealth of ideas that would be generated this way would be amazing.
The mere fact that all Ghanaians were consulted would result in greater commitment by all to the solution of the problem.
Writer’s E-mail: norbenne1@yahoo.com
Advertisement