Tuesday, December 22, 2015
Wednesday, December 16, 2015
Tuesday, December 8, 2015
GAWU urges mandatory lending to agric sector
THE General Agricultural Workers Union (GAWU) of the Ghana Trades Union Congress (TUC) is advocating a national policy that will compel banks to invest a certain portion of their loan portfolios in the agricultural sector.
The Deputy General Secretary of GAWU, Mr Edward Kareweh, told the GRAPHIC BUSINESS in an interview that the sector was being marginalised in terms of policy focus, hence the need for the government to intervene through policy directions.
Should the government heed the call and implement it, Mr Kwareh believes banks that did not abide by it should have their licences revoked and forced out of the sector.
“We are calling for a more serious reflection on the policies and development strategies of this country and the level of coherence of these policies and strategies,” he said.
The union’s comment is premised on recent data from the Ghana Statistical Services (GSS) on the contribution of the various sectors to Gross Domestic Product (GDP) for the second quarter of 2015.
Data from the GSS showed that the services sector maintained the lead in its contribution to GDP, accounting for 59.6 per cent. It was followed by the industry, which contributed 29.6 per cent to the period’s total productivity.
Agriculture, however, contributed 10.6 per cent; the lowest among the three sectors.
The GDP measures the value of final goods and services produced in the country.
GDP for the second quarter of the year 2015 grew by 3.9 per cent (year-on-year) compared to 2.6 per cent recorded for the second quarter of the year last year.
State of agriculture
In terms of growth, agriculture grew at negative 0.1 per cent between April and June this year.
The livestock sub-sector recorded a year-on-year growth rate of 13.4 per cent, while crops and cocoa sub-sector declined by negative 5.6 per cent.
Mr Kareweh said the place of agriculture could be determined by looking at first, its overall contribution to GDP and that of other sub-sectors.
“If we take the contribution of the agric sector in relation to other sectors, it suggests that as the size of the economy increases, agric takes a smaller proportion. This means the services sector is six times bigger than agric and industry three times bigger,” he said.
According to him, the figures also suggest that there has been an abnormal development trajectory.
Under normal circumstances, he said the services sector should not be leading in growth, given that the country was home to dozens of raw materials that could have been used to industrialise the economy.
“The growth of the services sector is predicated on the growth of agric and industry and if the two sectors are not growing and the services sector is growing, then there is a misnomer. This means that the services sector is servicing imports rather than agric or industry,” he said.
Currently, Ghana’s economy is considered an agrarian one, with much of the labour force — almost two-thirds — being in the agriculture sector.
Data further reveal that more than 70 per cent of the rural population is into agriculture.
Mr Kwareh said a decline in growth in the agricultural sector, therefore, signified that the country’s policy direction was not working.
“There is a policy failure because we are supposed to have irrigation agriculture but we continue to do rain-fed, which is erratic. That underscores our inability to fashion out measures to address the agriculture challenges,” he said. GB
writer’s email: ama.baafi@graphic.com.gh
Pull Quote
We are calling for a more serious reflection on the policies and development strategies of the country and their level of coherence.
Key Note
Experts have said government should make it mandatory for commercial banks in the country to set aside a proportion of their assets to support the growth of the agricultural sector.GAWU urges mandatory lending to agric sector
The Deputy General Secretary of GAWU, Mr Edward Kareweh, told the GRAPHIC BUSINESS in an interview that the sector was being marginalised in terms of policy focus, hence the need for the government to intervene through policy directions.
Should the government heed the call and implement it, Mr Kwareh believes banks that did not abide by it should have their licences revoked and forced out of the sector.
“We are calling for a more serious reflection on the policies and development strategies of this country and the level of coherence of these policies and strategies,” he said.
The union’s comment is premised on recent data from the Ghana Statistical Services (GSS) on the contribution of the various sectors to Gross Domestic Product (GDP) for the second quarter of 2015.
Data from the GSS showed that the services sector maintained the lead in its contribution to GDP, accounting for 59.6 per cent. It was followed by the industry, which contributed 29.6 per cent to the period’s total productivity.
Agriculture, however, contributed 10.6 per cent; the lowest among the three sectors.
The GDP measures the value of final goods and services produced in the country.
GDP for the second quarter of the year 2015 grew by 3.9 per cent (year-on-year) compared to 2.6 per cent recorded for the second quarter of the year last year.
State of agriculture
In terms of growth, agriculture grew at negative 0.1 per cent between April and June this year.
The livestock sub-sector recorded a year-on-year growth rate of 13.4 per cent, while crops and cocoa sub-sector declined by negative 5.6 per cent.
Mr Kareweh said the place of agriculture could be determined by looking at first, its overall contribution to GDP and that of other sub-sectors.
“If we take the contribution of the agric sector in relation to other sectors, it suggests that as the size of the economy increases, agric takes a smaller proportion. This means the services sector is six times bigger than agric and industry three times bigger,” he said.
According to him, the figures also suggest that there has been an abnormal development trajectory.
Under normal circumstances, he said the services sector should not be leading in growth, given that the country was home to dozens of raw materials that could have been used to industrialise the economy.
“The growth of the services sector is predicated on the growth of agric and industry and if the two sectors are not growing and the services sector is growing, then there is a misnomer. This means that the services sector is servicing imports rather than agric or industry,” he said.
Currently, Ghana’s economy is considered an agrarian one, with much of the labour force — almost two-thirds — being in the agriculture sector.
Data further reveal that more than 70 per cent of the rural population is into agriculture.
Mr Kwareh said a decline in growth in the agricultural sector, therefore, signified that the country’s policy direction was not working.
“There is a policy failure because we are supposed to have irrigation agriculture but we continue to do rain-fed, which is erratic. That underscores our inability to fashion out measures to address the agriculture challenges,” he said. GB
writer’s email: ama.baafi@graphic.com.gh
Pull Quote
We are calling for a more serious reflection on the policies and development strategies of the country and their level of coherence.
Key Note
Experts have said government should make it mandatory for commercial banks in the country to set aside a proportion of their assets to support the growth of the agricultural sector.GAWU urges mandatory lending to agric sector
SEND Ghana urges increased dialogue between Agric ministry, agencies
A development expert has recommended that Ghana finds ways of deepening collaboration between the agriculture ministry and its allied institutions if it really wants to make headway in linking social protection (SP) with agriculture to reduce poverty and hunger.
The Country Director of SEND Ghana, Mr George Osei-Bimpeh, said that at the moment there was not a strong link between what the agriculture sector is offering and the mainstream SP agencies are offering.
In an interview with the GRAPHIC BUSINESS, he said the above situation was largely because institutional collaboration and coordination had been very weak, “and so we don’t seem to align our SP programmes with the agric sector with a view of targeting women specifically, and persons with disability. These are challenges and these are things that at the moment not happening.”
Mr Osei-Bimpeh was speaking on a new report by the Food and Agriculture Organisation (FAO), of the United Nations (UN), titled “The State of Food and Agriculture 2015,” that states in poor countries, social protection schemes, such as cash transfers, school feeding and public works, offer an economical way to provide vulnerable people with opportunities to move out of extreme poverty and hunger and to improve their children's health, education and life chances.
He said that unlike between health and SP where Livelihood Empowerment Against Poverty programme (LEAP) was used to identify indigenes in order to register them for the purposes of accessing the National Health Insurance (NHI), “in the case of agric there isn’t a clear target of the vulnerable of those in the sector so there isn’t also a clear linkage between what the agric sector is providing and what mainstream SP programmes are also providing.”
SP is a set of interventions to reduce social and economic risk and vulnerability, and alleviate
extreme poverty and deprivation.
SP and agriculture to reduce poverty and hunger
Mr Osei-Bimpeh said that basically, what SP looked at the vulnerable groups in society to provide them with access to basic services and so when its is linked with agriculture, then it is addressing the nutritional needs while ensuring that the selected individual have access to basic social services.
“In this case you are building the social capital of such individuals and as you link agric to that it means that you are using an isolated poverty reduction approach so that your attempts to reduce poverty is not only one dimension of it than looking at all forms of it,” he said.
Although the report mentions economic growth as a key factor in reducing poverty and hunger, it said that alone was not sufficient but needed to be inclusive to reach the poorest.
“Yes in the sense that where growth is not inclusive it’s only in the service sector and the service sector doesn’t employ vulnerable groups. In that case growth is not inclusive. Inclusive growth should be perused in terms of making sure that all the sectors in the economy of the population benefits from the growth that you generate,” he said.
SP and dependency
Mr Osei-Bimpeh said SP did not foster dependency per se but was used as way of building capacities beneficiaries to be on their own.
In this way, at any point in time, he said there should be a clear plan of exiting while ensuring that they do not just exit from programmes but they exit with newly acquired skills and capital that have been accumulated over the years.
“If we are able to do that then we cannot say that it creates dependency. However, if we fail to do that and we also fail to ensure strong monitoring of the utilisation of such intervention then we only succeed in just providing protection without talking about how people can begin to depend on themselves. Of course that is where it creates a dependency syndrome,” he said.
The FAO report
It was released on the eve of World Food Day (October 16, 2015), and focuses on SP’s role in breaking the cycle of rural poverty.
It said such programmes currently benefit 2.1 billion people in developing countries in various ways, including keeping 150 million people out of extreme poverty.
“Expanding such programs in rural areas and linking them to inclusive agricultural growth policies would rapidly reduce the number of poor people,” the report said.
A news release quoted the FAO Director-General, Mr José Graziano da Silva, as saying that it was urgent to act to support the most vulnerable people in order to free the world of hunger.
“Social protection programs allow households to access more food - often by increasing what they grow themselves -- and also make their diets more diverse and healthier. These programs can have positive impacts on infant and maternal nutrition, reduce child labor and raise school attendance, all of which increase productivity,” he said. GB
Writer’s email: ama.baafi@graphic.com.gh
Pull Quote
Expanding such programs in rural areas and linking them to inclusive agricultural growth policies would rapidly reduce the number of poor people.
Key Note
Social protection protects the poor and prevents worse deprivation.
The Country Director of SEND Ghana, Mr George Osei-Bimpeh, said that at the moment there was not a strong link between what the agriculture sector is offering and the mainstream SP agencies are offering.
In an interview with the GRAPHIC BUSINESS, he said the above situation was largely because institutional collaboration and coordination had been very weak, “and so we don’t seem to align our SP programmes with the agric sector with a view of targeting women specifically, and persons with disability. These are challenges and these are things that at the moment not happening.”
Mr Osei-Bimpeh was speaking on a new report by the Food and Agriculture Organisation (FAO), of the United Nations (UN), titled “The State of Food and Agriculture 2015,” that states in poor countries, social protection schemes, such as cash transfers, school feeding and public works, offer an economical way to provide vulnerable people with opportunities to move out of extreme poverty and hunger and to improve their children's health, education and life chances.
He said that unlike between health and SP where Livelihood Empowerment Against Poverty programme (LEAP) was used to identify indigenes in order to register them for the purposes of accessing the National Health Insurance (NHI), “in the case of agric there isn’t a clear target of the vulnerable of those in the sector so there isn’t also a clear linkage between what the agric sector is providing and what mainstream SP programmes are also providing.”
SP is a set of interventions to reduce social and economic risk and vulnerability, and alleviate
extreme poverty and deprivation.
SP and agriculture to reduce poverty and hunger
Mr Osei-Bimpeh said that basically, what SP looked at the vulnerable groups in society to provide them with access to basic services and so when its is linked with agriculture, then it is addressing the nutritional needs while ensuring that the selected individual have access to basic social services.
“In this case you are building the social capital of such individuals and as you link agric to that it means that you are using an isolated poverty reduction approach so that your attempts to reduce poverty is not only one dimension of it than looking at all forms of it,” he said.
Although the report mentions economic growth as a key factor in reducing poverty and hunger, it said that alone was not sufficient but needed to be inclusive to reach the poorest.
“Yes in the sense that where growth is not inclusive it’s only in the service sector and the service sector doesn’t employ vulnerable groups. In that case growth is not inclusive. Inclusive growth should be perused in terms of making sure that all the sectors in the economy of the population benefits from the growth that you generate,” he said.
SP and dependency
Mr Osei-Bimpeh said SP did not foster dependency per se but was used as way of building capacities beneficiaries to be on their own.
In this way, at any point in time, he said there should be a clear plan of exiting while ensuring that they do not just exit from programmes but they exit with newly acquired skills and capital that have been accumulated over the years.
“If we are able to do that then we cannot say that it creates dependency. However, if we fail to do that and we also fail to ensure strong monitoring of the utilisation of such intervention then we only succeed in just providing protection without talking about how people can begin to depend on themselves. Of course that is where it creates a dependency syndrome,” he said.
The FAO report
It was released on the eve of World Food Day (October 16, 2015), and focuses on SP’s role in breaking the cycle of rural poverty.
It said such programmes currently benefit 2.1 billion people in developing countries in various ways, including keeping 150 million people out of extreme poverty.
“Expanding such programs in rural areas and linking them to inclusive agricultural growth policies would rapidly reduce the number of poor people,” the report said.
A news release quoted the FAO Director-General, Mr José Graziano da Silva, as saying that it was urgent to act to support the most vulnerable people in order to free the world of hunger.
“Social protection programs allow households to access more food - often by increasing what they grow themselves -- and also make their diets more diverse and healthier. These programs can have positive impacts on infant and maternal nutrition, reduce child labor and raise school attendance, all of which increase productivity,” he said. GB
Writer’s email: ama.baafi@graphic.com.gh
Pull Quote
Expanding such programs in rural areas and linking them to inclusive agricultural growth policies would rapidly reduce the number of poor people.
Key Note
Social protection protects the poor and prevents worse deprivation.
Govt to expand LEAP coverage
By Ama Amankwah Baafi
THE government plans to scale up its spending on the Livelihood Empowerment Against Poverty (LEAP) with an amount of GH¢50.00 million and to extend coverage of the programme to more than 250,000 beneficiary households.
The Minister of Finance, Mr Seth Terkper, during the presentation of the 2016 Budget to Parliament yesterday, said the policy was needed to address the weaknesses in social protection (SP) programmes and to serve as a coordinated approach towards the effective and efficient provision of SP generally, and ensure that the programmes were better targeted.
The main interventions being implemented currently include the LEAP, Social Inclusion Transfers (SITs), School Feeding, Take-home Rations for Girls, Free School Uniforms, Free Exercise Books, Programme on Elimination of Child Labour, Education Capitation Grants and Supplementary Grant (GEP).
The rest are the National Health Insurance Scheme (NHIS) Exemptions, Government Subsidy for Senior High Schools (SHS), GETFund Scholarships, Senior Secondary Scholarships and Girls-PASS Scholarships.
The government, he said, would maintain those programmes as priority areas of spending in 2016.
Mr Terkper also indicated that the government had made provisions for the implementation of a social protection policy (SPP) in the 2016 budget as part of a broader national development strategy to address the extreme poverty and vulnerabilities in the country.
SPP
According to the finance minister, the social protection programmes implemented over the years had sought to provide some compatriots respite from hardships and, further, equip them to participate in the basic socio-economic activities.
Those programmes, however, had not always achieved the expected outcomes due to poor targeting and uncoordinated approach to their delivery.
“The policy document seeks to structure and anchor social protection with accompanying institutional reforms to deliver identified priority interventions. It seeks to clarify social protection objectives to which Ghana can aspire at each stage of our development. The document, therefore, defines social protection for Ghana as a range of actions carried out by the state and other parties in response to vulnerability and poverty, which seeks to guarantee relief for those sections of the population who for any reason are not able to provide for themselves,” he said.
The SPP identifies three main vulnerability categories: The chronically poor (the severely disabled, terminally ill, rural unemployed, urban unemployed and subsistent smallholders); the economically at risk (food crop farmers, persons on the street, internally displaced persons, orphans, informal sector workers, widows, older persons and migrants); and the socially vulnerable (tuberculosis sufferers, victims of domestic violence, homeless persons, people living on the street, internally displaced persons and female-headed households).
SEND Ghana
The Country Director of SEND Ghana, Mr George Osei-Bimpeh, said such a policy should clearly address the challenges associated with the release of resources for the implementation of the social protection programmes.
“Is there a guarantee that without a proper framework for institutional collaboration greater outcome can be achieved?,” he asked.
ISODEC
A Policy Analyst at the Integrated Social Development Centre (ISODEC), Mrs Charlotte Esenam Afudego, explained that social intervention programmes must be well targeted to reap the desired benefits and explained that there should be coordination among all stakeholders involved and these interventions should be able to target the poor ones who need it most.
LEAP
Mr Terkper said that in 2016, the government would scale up spending on the LEAP with GH¢50.00 million and that it would be expanded to cover over 250,000 beneficiary households. It would also strengthen the institutional arrangements for SP.
The main social insurance interventions currently being implemented in Ghana are the National Health Insurance Scheme (NHIS) and the Social Security and National Insurance Trust (SSNIT).
At the end of September 2015, GH¢929.69 million had been transferred to the National Health Fund, while SSNIT received GH¢650.47 million for the same period.
In 2016, GH¢1,497.28 million is projected for NHIS transfers, while SSNIT will receive GH¢1,289.51 million.
Spending on poverty-reduction activities
Mr Terkper said spending on poverty-related activities were government expenditures incurred on the activities of MDAs and MMDAs which were considered to be poverty related and had, each year, supported the provision of basic education, primary health care, poverty-focused agriculture, rural water, feeder roads and rural electrification.
“Total government spending on pro-poor activities for 2016 is estimated at GH¢8,754.13 million, representing 22.67 per cent of GH¢38,611.44 million total government expenditure. Out of a total budget for 2015 of GH¢34,402.43 million (which excludes tax expenditures and foreign-financed capital expenditures), an amount of GH¢7,594.34 million, representing 22.08 per cent was earmarked for poverty-reduction activities. By the end of September, 2015, a total of GH¢5,290.87 million had been spent, representing 24.18 per cent of the total government expenditures of GH¢21,884.32 million,” he said.
Other poverty
For 2016, GH¢2,511.70 million is projected to be spent on “Other Poverty” and this represents 6.51 per cent of total government expenditure.
According to the finance minister, GH¢1,263.46 million was spent on other poverty-related activities, representing 5.78 per cent of total government expenditure at the end of the first three quarters of 2015.
The other poverty expenditure include spending on social welfare, public safety, drainage, human rights, environmental protection, rural housing, legal aid and decentralisation. GB
QUICK READ
By Ama Amankwah Baafi
THE government plans to scale up its spending on the Livelihood Empowerment Against Poverty (LEAP) with an amount of GH¢50.00 million and to extend coverage of the programme to more than 250,000 beneficiary households.
The Minister of Finance, Mr Seth Terkper, during the presentation of the 2016 Budget to Parliament yesterday, said the policy was needed to address the weaknesses in social protection (SP) programmes and to serve as a coordinated approach towards the effective and efficient provision of SP generally, and ensure that the programmes were better targeted.
The main interventions being implemented currently include the LEAP, Social Inclusion Transfers (SITs), School Feeding, Take-home Rations for Girls, Free School Uniforms, Free Exercise Books, Programme on Elimination of Child Labour, Education Capitation Grants and Supplementary Grant (GEP).
The rest are the National Health Insurance Scheme (NHIS) Exemptions, Government Subsidy for Senior High Schools (SHS), GETFund Scholarships, Senior Secondary Scholarships and Girls-PASS Scholarships.
The government, he said, would maintain those programmes as priority areas of spending in 2016.
Mr Terkper also indicated that the government had made provisions for the implementation of a social protection policy (SPP) in the 2016 budget as part of a broader national development strategy to address the extreme poverty and vulnerabilities in the country.
SPP
According to the finance minister, the social protection programmes implemented over the years had sought to provide some compatriots respite from hardships and, further, equip them to participate in the basic socio-economic activities.
Those programmes, however, had not always achieved the expected outcomes due to poor targeting and uncoordinated approach to their delivery.
“The policy document seeks to structure and anchor social protection with accompanying institutional reforms to deliver identified priority interventions. It seeks to clarify social protection objectives to which Ghana can aspire at each stage of our development. The document, therefore, defines social protection for Ghana as a range of actions carried out by the state and other parties in response to vulnerability and poverty, which seeks to guarantee relief for those sections of the population who for any reason are not able to provide for themselves,” he said.
The SPP identifies three main vulnerability categories: The chronically poor (the severely disabled, terminally ill, rural unemployed, urban unemployed and subsistent smallholders); the economically at risk (food crop farmers, persons on the street, internally displaced persons, orphans, informal sector workers, widows, older persons and migrants); and the socially vulnerable (tuberculosis sufferers, victims of domestic violence, homeless persons, people living on the street, internally displaced persons and female-headed households).
SEND Ghana
The Country Director of SEND Ghana, Mr George Osei-Bimpeh, said such a policy should clearly address the challenges associated with the release of resources for the implementation of the social protection programmes.
“Is there a guarantee that without a proper framework for institutional collaboration greater outcome can be achieved?,” he asked.
ISODEC
A Policy Analyst at the Integrated Social Development Centre (ISODEC), Mrs Charlotte Esenam Afudego, explained that social intervention programmes must be well targeted to reap the desired benefits and explained that there should be coordination among all stakeholders involved and these interventions should be able to target the poor ones who need it most.
LEAP
Mr Terkper said that in 2016, the government would scale up spending on the LEAP with GH¢50.00 million and that it would be expanded to cover over 250,000 beneficiary households. It would also strengthen the institutional arrangements for SP.
The main social insurance interventions currently being implemented in Ghana are the National Health Insurance Scheme (NHIS) and the Social Security and National Insurance Trust (SSNIT).
At the end of September 2015, GH¢929.69 million had been transferred to the National Health Fund, while SSNIT received GH¢650.47 million for the same period.
In 2016, GH¢1,497.28 million is projected for NHIS transfers, while SSNIT will receive GH¢1,289.51 million.
Spending on poverty-reduction activities
Mr Terkper said spending on poverty-related activities were government expenditures incurred on the activities of MDAs and MMDAs which were considered to be poverty related and had, each year, supported the provision of basic education, primary health care, poverty-focused agriculture, rural water, feeder roads and rural electrification.
“Total government spending on pro-poor activities for 2016 is estimated at GH¢8,754.13 million, representing 22.67 per cent of GH¢38,611.44 million total government expenditure. Out of a total budget for 2015 of GH¢34,402.43 million (which excludes tax expenditures and foreign-financed capital expenditures), an amount of GH¢7,594.34 million, representing 22.08 per cent was earmarked for poverty-reduction activities. By the end of September, 2015, a total of GH¢5,290.87 million had been spent, representing 24.18 per cent of the total government expenditures of GH¢21,884.32 million,” he said.
Other poverty
For 2016, GH¢2,511.70 million is projected to be spent on “Other Poverty” and this represents 6.51 per cent of total government expenditure.
According to the finance minister, GH¢1,263.46 million was spent on other poverty-related activities, representing 5.78 per cent of total government expenditure at the end of the first three quarters of 2015.
The other poverty expenditure include spending on social welfare, public safety, drainage, human rights, environmental protection, rural housing, legal aid and decentralisation. GB
QUICK READ
Personal income tax rate has been reduced by 67.7 per cent in the 2016 budget, a Tax Policy Advisor at the Ministry of Finance (MoF), Dr Edward Larbi-Siaw, has said.
He said government in line with its social democratic principles had reviewed the income tax thresholds from a minimum of GH₵1,584 to GH₵2,592, in spite of the drawback in personal income tax rates in the country.
“The first GH₵1,584 to the last exceeding GH₵31,680 has been in existence for the past three years. If we are able to get more people paying our personal income tax, we should be able to revise these rates. If there is excess expenditure over revenue, it has to be funded, domestic borrowing or external and if we borrow domestically, we disadvantage the local entrepreneurs and also the interest rate will go up,” he said at a post budget forum for members of the Institute of Financial Journalists (IFEJ) and the Parliamentary Press Corps in Accra.
He said if at least six million Ghanaians should be paying tax from the current four million, out of a population of about 27 million, it would reduce the tax burden.
“Let me be plain, if we are not able to increase the numbers we are unable to reduce the burden. Currently, the income tax contribution figure is at GH¢4.1 billion so if there is a double of this, you can imagine what it can do. So as a nation, let’s mount a campaign that everybody must pay his or her taxes,” he said.
Getting the population to pay their taxes
Dr Larbi-Siaw said poverty was a bar to taxation but not illiteracy as people believed and that most countries relied on their citizenry for information on tax evaders but unfortunately the case was different in Ghana.
“We know those who are not paying so why should we sit down and be paying for others? It is this Ghanaian rhythm I’m still trying to understand. You journalists are part of the people who can bring change,” he said.
He said the ministry was working on an existing system which demanded that by law every Ghanaian with income above GH¢2,592 was to file a return and if implemented would help.
Budget on closing the funding gap
To enhance resource mobilisation, government introduced a number of tax policy and administration to enhance efficiency in tax administration, compliance and increase tax revenue.
The budget states that efforts are being made to extend the Tax Identification Number (TIN) to other sectors to facilitate the identification of eligible taxpayers. Eventually, the TIN will form part of the relaunch of the National Identification Number initiative to serve multiple national requirements.
Commercial vegetable production
A Technical Advisor to the Ministry of Finance, Dr John Kofi Baffoe, said the ministry would work with the Ministry of Agriculture to set up Green House Capacity Building and training centres for the production of commercialised vegetables.
He said there would be centres of excellence where small and large scale farmers would be trained to produce specific varieties for the value chain and that the initiative would complement the work of agriculture extension officers.
“The principle is that agriculture is going to be seen as a business and not the usual small scale production. We are going to have training centres in the country to train agric graduates, women and youth in commercialised, modernised vegetable production. They will be trained and possibly be given seed money to start with,” he said.
Subvented agencies
Mr Baffour said some state owned enterprises (SOEs) were identified to be capable to exist on their own without subvention from government, and so they were going to be turned into companies.
“The Driver Vehicle and Licensing Authority (DVLA), Environmental Protection Agency (EPA), Energy Commission, Gaming Commission, Securities and Exchange Commission (SEC), Data Protection Commission, all these will eventually be turned into companies where they will run as business,” he said.
He added that potential ones to be eventually weaned off are the Ghana Broadcasting Corporation (GBC), Ghana Standards Authority (GSA), teaching hospitals, all tertiary institutions, Forestry Commission, Minerals Commission, Ghana Investment Promotion Centre (GIPC), and the Food and Drugs Authority (FDA). GB
writer’s email: ama.baafi@graphic.com.gh
Pull Quote
If there is excess expenditure over revenue it has to be funded, domestic borrowing or external and if we borrow domestically, we disadvantage the local entrepreneurs and also the interest rate will go up.
Key note
To improve the fairness, progression and also provide tax relief to the minimum wage earners, the existing minimum income which is exempted from income tax will be increased from GH¢1,584 to GH¢2,592.
He said government in line with its social democratic principles had reviewed the income tax thresholds from a minimum of GH₵1,584 to GH₵2,592, in spite of the drawback in personal income tax rates in the country.
“The first GH₵1,584 to the last exceeding GH₵31,680 has been in existence for the past three years. If we are able to get more people paying our personal income tax, we should be able to revise these rates. If there is excess expenditure over revenue, it has to be funded, domestic borrowing or external and if we borrow domestically, we disadvantage the local entrepreneurs and also the interest rate will go up,” he said at a post budget forum for members of the Institute of Financial Journalists (IFEJ) and the Parliamentary Press Corps in Accra.
He said if at least six million Ghanaians should be paying tax from the current four million, out of a population of about 27 million, it would reduce the tax burden.
“Let me be plain, if we are not able to increase the numbers we are unable to reduce the burden. Currently, the income tax contribution figure is at GH¢4.1 billion so if there is a double of this, you can imagine what it can do. So as a nation, let’s mount a campaign that everybody must pay his or her taxes,” he said.
Getting the population to pay their taxes
Dr Larbi-Siaw said poverty was a bar to taxation but not illiteracy as people believed and that most countries relied on their citizenry for information on tax evaders but unfortunately the case was different in Ghana.
“We know those who are not paying so why should we sit down and be paying for others? It is this Ghanaian rhythm I’m still trying to understand. You journalists are part of the people who can bring change,” he said.
He said the ministry was working on an existing system which demanded that by law every Ghanaian with income above GH¢2,592 was to file a return and if implemented would help.
Budget on closing the funding gap
To enhance resource mobilisation, government introduced a number of tax policy and administration to enhance efficiency in tax administration, compliance and increase tax revenue.
The budget states that efforts are being made to extend the Tax Identification Number (TIN) to other sectors to facilitate the identification of eligible taxpayers. Eventually, the TIN will form part of the relaunch of the National Identification Number initiative to serve multiple national requirements.
Commercial vegetable production
A Technical Advisor to the Ministry of Finance, Dr John Kofi Baffoe, said the ministry would work with the Ministry of Agriculture to set up Green House Capacity Building and training centres for the production of commercialised vegetables.
He said there would be centres of excellence where small and large scale farmers would be trained to produce specific varieties for the value chain and that the initiative would complement the work of agriculture extension officers.
“The principle is that agriculture is going to be seen as a business and not the usual small scale production. We are going to have training centres in the country to train agric graduates, women and youth in commercialised, modernised vegetable production. They will be trained and possibly be given seed money to start with,” he said.
Subvented agencies
Mr Baffour said some state owned enterprises (SOEs) were identified to be capable to exist on their own without subvention from government, and so they were going to be turned into companies.
“The Driver Vehicle and Licensing Authority (DVLA), Environmental Protection Agency (EPA), Energy Commission, Gaming Commission, Securities and Exchange Commission (SEC), Data Protection Commission, all these will eventually be turned into companies where they will run as business,” he said.
He added that potential ones to be eventually weaned off are the Ghana Broadcasting Corporation (GBC), Ghana Standards Authority (GSA), teaching hospitals, all tertiary institutions, Forestry Commission, Minerals Commission, Ghana Investment Promotion Centre (GIPC), and the Food and Drugs Authority (FDA). GB
writer’s email: ama.baafi@graphic.com.gh
Pull Quote
If there is excess expenditure over revenue it has to be funded, domestic borrowing or external and if we borrow domestically, we disadvantage the local entrepreneurs and also the interest rate will go up.
Key note
To improve the fairness, progression and also provide tax relief to the minimum wage earners, the existing minimum income which is exempted from income tax will be increased from GH¢1,584 to GH¢2,592.
2016 budget to address crop sub-sector challenges
The General Agricultural Workers’ Union (GAWU), affiliated to the Ghana Trades Union Congress (TUC), says it is happy that the 2016 budget seeks to address the declining performance of the crop sub-sector, by allocating a substantial amount to fertiliser and mechanisation.
Growth in crops sub-sector of agriculture declined from 5.9 per cent in 2013 to 3.6 per cent in 2014.
Thankfully a total of GH¢355.14 million has been allocated to the agricultural sector, out of which about GH¢302.46 million, representing 85.17 per cent, is to be spent on the Fertiliser Subsidy Programme (FSP) and the Agricultural Mechanisation Service Centres (AMSECs).
Commenting on the 2016 allocation to the agric sector, the Deputy General Secretary of GAWU, Mr Edward Kareweh, said though the crop sub-sector was not explicitly stated, “the fact that much of the allocation is going into fertiliser and mechanisation also means the overall performance of agric would improve because within the sector, the crop sub-sector has weight and so what happens there has a significant impact on the overall performance of the sector.”
He said that the policy, if implemented to the latter would bring back the fortunes of the sector.
“What we need to emphasise is that implementation must take place. Most often there is a huge gap between what has been allocated and what is spent at the end of the year. Targeted sub-sectors within sector must be adhered to strictly,” he said.
He cited tax exemption to companies that go into agro-processing in the first five years as a complementary policy that would induce a large number of entrants into the agro-processing business.
“It will eliminate the glut and create ready market. Sometimes it is also the complementary policies that actually undermine or prop up a particular major policy,” he said.
Caution
Mr Kareweh however advised on the need to deal with other policies that counter or undermine the effect of the new agriculture policy.
“For instance if we don’t do much about unbridled importation of cheap agriculture produce, that will actually take over the whole domestic market and create a huge loss for producers within the crop sub-sector. So we should watch out for those counter unproductive policies and address them so that we can have the full import of the budget,” he said.
2015 expenditure on agric
Total budgeted expenditure for the agriculture sector in 2015 was GH¢395.19 million. By the end of September 2015, GH¢91.54 million had been spent and about GH¢82.57 million of this actual sector expenditure, representing 90.21 per cent, was spent on poverty focused expenditures such as the FSP and the establishment of AMSECs, among others to boost agricultural production.
In 2016, however, 50 tractors with the requisite components will be procured to support the AMSECs.
In the same year, 90,000mt, out of a target of 180,000mt of fertiliser was procured and distributed to farmers nationwide and is expected to increase the use of fertiliser in the country and also enhance crop production especially in the Northern Sector where soil nutrients are low.
Again, in compliance with the Plant and Fertiliser Act, 2010 (Act 803), the ministry in collaboration with relevant stakeholders analysed 11 out of 60 newly introduced fertiliser samples. Out of the 11 samples analysed, only four met the technical and regulatory requirements.
In 2016, the remaining 49 fertiliser samples would be analysed in order to ensure good quality fertilisers and increased productivity.
State of agriculture
Agriculture grew at negative 0.1 per cent between April and June 2015. The livestock sub-sector recorded a year-on-year growth rate of 13.4 per cent, while crops and cocoa sub-sector declined by negative 5.6 per cent.
Experts say the place of agriculture could be determined by fist looking at its overall contribution to Gross Domestic Product (GDP) and that of other sub-sectors.
Currently, Ghana’s economy is considered an agrarian one, with much of the labour force, almost two-thirds being in the agriculture sector. Data further reveal that more than 70 per cent of the rural population is into agriculture.GB
writer’s email: ama.baafi@graphic.com.gh
Pull Quote
Most often than not there tend to be a huge gap between what has been allocated and what is spent at the end of the year. Targeted sub-sectors within sector must be adhered to strictly.
Growth in crops sub-sector of agriculture declined from 5.9 per cent in 2013 to 3.6 per cent in 2014.
Thankfully a total of GH¢355.14 million has been allocated to the agricultural sector, out of which about GH¢302.46 million, representing 85.17 per cent, is to be spent on the Fertiliser Subsidy Programme (FSP) and the Agricultural Mechanisation Service Centres (AMSECs).
Commenting on the 2016 allocation to the agric sector, the Deputy General Secretary of GAWU, Mr Edward Kareweh, said though the crop sub-sector was not explicitly stated, “the fact that much of the allocation is going into fertiliser and mechanisation also means the overall performance of agric would improve because within the sector, the crop sub-sector has weight and so what happens there has a significant impact on the overall performance of the sector.”
He said that the policy, if implemented to the latter would bring back the fortunes of the sector.
“What we need to emphasise is that implementation must take place. Most often there is a huge gap between what has been allocated and what is spent at the end of the year. Targeted sub-sectors within sector must be adhered to strictly,” he said.
He cited tax exemption to companies that go into agro-processing in the first five years as a complementary policy that would induce a large number of entrants into the agro-processing business.
“It will eliminate the glut and create ready market. Sometimes it is also the complementary policies that actually undermine or prop up a particular major policy,” he said.
Caution
Mr Kareweh however advised on the need to deal with other policies that counter or undermine the effect of the new agriculture policy.
“For instance if we don’t do much about unbridled importation of cheap agriculture produce, that will actually take over the whole domestic market and create a huge loss for producers within the crop sub-sector. So we should watch out for those counter unproductive policies and address them so that we can have the full import of the budget,” he said.
2015 expenditure on agric
Total budgeted expenditure for the agriculture sector in 2015 was GH¢395.19 million. By the end of September 2015, GH¢91.54 million had been spent and about GH¢82.57 million of this actual sector expenditure, representing 90.21 per cent, was spent on poverty focused expenditures such as the FSP and the establishment of AMSECs, among others to boost agricultural production.
In 2016, however, 50 tractors with the requisite components will be procured to support the AMSECs.
In the same year, 90,000mt, out of a target of 180,000mt of fertiliser was procured and distributed to farmers nationwide and is expected to increase the use of fertiliser in the country and also enhance crop production especially in the Northern Sector where soil nutrients are low.
Again, in compliance with the Plant and Fertiliser Act, 2010 (Act 803), the ministry in collaboration with relevant stakeholders analysed 11 out of 60 newly introduced fertiliser samples. Out of the 11 samples analysed, only four met the technical and regulatory requirements.
In 2016, the remaining 49 fertiliser samples would be analysed in order to ensure good quality fertilisers and increased productivity.
State of agriculture
Agriculture grew at negative 0.1 per cent between April and June 2015. The livestock sub-sector recorded a year-on-year growth rate of 13.4 per cent, while crops and cocoa sub-sector declined by negative 5.6 per cent.
Experts say the place of agriculture could be determined by fist looking at its overall contribution to Gross Domestic Product (GDP) and that of other sub-sectors.
Currently, Ghana’s economy is considered an agrarian one, with much of the labour force, almost two-thirds being in the agriculture sector. Data further reveal that more than 70 per cent of the rural population is into agriculture.GB
writer’s email: ama.baafi@graphic.com.gh
Pull Quote
Most often than not there tend to be a huge gap between what has been allocated and what is spent at the end of the year. Targeted sub-sectors within sector must be adhered to strictly.
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