The Africa Centre for Entrepreneurship and Youth Empowerment (ACEYE) has waded into the revenue mobilisation of Ghana’s 2022 Budget Statement and Economic Policy and how it intends to support youth entrepreneurship while addressing the issue of unemployment.
It has advised the government to prioritize and privatize at least 50% of the existing 126 State-Owned Enterprises (SOEs) to generate revenue since they are characterised by losses instead of an E-levy which is unproductive, burdensome, extractive and regressive.
However, it cautioned the government to follow due diligence in the process to avoid cronyism, favouritism and undervaluation of these enterprises.
Mr Emmanuel Acquah, Co-founder of ACEYE who gave the advice in a press statement recounted that in 2019, the SOEs sector recorded an aggregate net loss of GHc 586.49 million which compares to a loss position of GHc 188 million in 2018.
According to him, regardless of the numerous interventions, SOEs have proven not to be profitable and sustainable as per the reasons given towards their establishment.
He cited the Intercity STC which has received the Government’s capital injection about three times and was still making losses being on the verge of collapse adding, “the same can be said of Metro Mass Transit (MMT).”
He was of the view that taxing people to develop SOEs will not prove fruitful since it has been done for years and had still not yielded any good results. “The question begging is, why then would the government think increasing taxes to get more money for the SOEs will work?”
Mr Acquah noted that some other factors which were not the need for capital injection were killing the SOEs, meaning that the ventures were not profitable whose business models need to be revised when they are privatized.
Making reference from the Regional Entrepreneurship Freedom (REF) Index Report conducted by ACEYE, he noted that the business environment was not conducive enough to help businesses to thrive with ease and as part of the corrective measures, it advocated that the government refrains from doing business, especially when private individuals can allocate capital appropriately and maximize value.
He quoted the Finance Minister who said the E-levy will increase the country’s tax-to-GDP from 13% to a targeted 16% or more and argued that the Minister failed to mention that the E-levy will diminish capital since Mobile Money Wallets have emerged as the easily accessible means of savings and capital accumulation within Ghana’s informal sector.
He further quoted the Minister, “Mr Speaker, over the past 18 months, it has become clear that if the African continent is to be globally competitive, it must embrace the common vision of creating an integrated and inclusive digital society that improves the quality of life of citizens, strengthens the development of the private sector, and advances Africa’s quest to attain the Sustainable Development Goals” and said the Minister contradicted himself.
Mr Acquah indicated that taxation has never been an antidote to the challenges in building an integrated and inclusive society but rather marginalizes the poor and denies entrepreneurs the opportunity of creating value to make life easier for the masses and thus, cannot develop the private sector either will it do any good to Ghana’s informal sector.
He said ACEYE was committed to entrepreneurial freedom through its REF Index and believes that this would complicate the already existing problems entrepreneurs were facing in the country due to the governments’ interference in certain aspects of the economy.