It would be the height of insensitivity on my part to suggest that all is well when the reality is that things have taken a downward spiral with respect to the economy.
We have said or admitted several times that times are hard and for that matter, Ghanaians, in general, are in hardships. We have also made the point, quite strongly, that we are not an island in this whole post-COVID-19 and Russia/Ukraine conflict effects.
Our big brother, Nigeria, contrary to what some would want us to believe, is also suffocating with debts and has had to introduce stringent measures to redeem the economy from collapsing. Read what Bloomberg has reported about Nigeria. They have introduced 5% taxation on mobile services including data, text messages and calls. Read the full report from Bloomberg:
Nigeria, Africa’s biggest wireless market, is moving ahead with a proposed 5% tax on voice calls, mobile data and text messages to tackle a mounting fiscal crisis.
Finance Minister Zainab Ahmed announced the implementation of the tax, delayed since last year, in an emailed statement that highlighted the government’s strained financial picture. As of April, Africa’s biggest crude producer spends more on debt servicing than it brings in revenue.
“Although Nigeria is celebrated as the largest economy in Africa, translating this wealth into revenues remains a challenge,” Ahmed said. The statement did not say when collections of the levy, which is in addition to a 7.5% value-added tax on calls and data, will begin.
Communications Minister Isa Pantami earlier this month asked the government to reconsider the tax on the grounds that it could slow the expansion of one of the country’s fastest-growing sectors.
A similar tax introduced by West African neighbour Ghana was blamed for a slowdown in mobile-money revenue by MTN Ghana in its first half results. Ghana, also facing a fiscal crisis, introduced a 1.5% e-levy in May to boost government revenue and reduce its burgeoning budget deficit.
Nigeria has one of the lowest tax-to-GDP ratios in the world, at 6% in 2019, according to the Organization for Economic Cooperation and Development. The government generated 1.63 trillion naira ($3.8 billion) in revenue in the four months through April, against 1.94 trillion naira in debt service payments for the period.
It is safer to conclude that no country is free from the shackles of the COVID-19 pandemic and the continuous conflict between Russia and Ukraine. It is difficult but let’s bear with it. Things will change.
P.K.Sarpong, Whispers from the Corridors of the Thinking Place.
