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Does the average Ghanaian understand
the economy?
Accra, June 6, Ghanadot/GNA -
The news of the reduction of taxes on rice and other
agricultural products as well as various mechanisms to
cushion the average Ghanaian against the impact of the high
oil prices on the world market came with mixed feelings.
While some people linked this to strictly political reasons
others saw a sense in the deal and praised the Government
for the venture.
Whether the announcement of the reduced taxes would have
impact on the Ghanaian economy is another debate altogether
that is not part of the reason for this article.
Translating what President John Agyekum Kufuor did on that
fateful Thursday night, in literal terms one would say;
"prices of rice have been reduced".
This in actual terms is not what the President said. "He
said the Minister of Finance has been directed to urgently
seek approval for the measure to take effect."
Does this communicate anything to the Government? It seems a
lot of people do not understand what controls the economy
and what goes on to affect price increases or reduction.
Ghana for now does not produce oil nor export oil, even
though Ghana has struck oil. This means that no matter what
Government is in power, there is the need to buy oil from
oil producing countries.
Ghana does not determine oil prices, it is unthinkable,
neither does it determine the prices of cocoa or gold that
she produced and exported.
So for instance if the buyers of cocoa and gold decide that
the prices of these goods should go down the country has no
option, which means that income to the country in terms of
cocoa and gold revenue would reduce while the government
would need more money to buy oil.
How does one analyze a situation like this, it means that
taxes remain the only option to enable the Government get
money to run the country apart form the donor support from
other countries.
In this case one would say that reduction of taxes on
imports is not the best solution to the problem even though
it is acknowledged that there is a problem, which the whole
world is facing and Ghana is not an exception.
But Ghana does not act in isolation, the world has become a
global village and what affects one country could affect
other countries.
An example is the famous September 11 in the United States,
it affected tourism and travel in the whole world including
Ghana.
Similarly the increase in oil prices on the world market
affects the poor boy selling on the streets of Accra even
though he does not really know about it.
Perhaps that is why it is important for governments in
Africa to make it a duty to explain in simple and plain
language the need for development cooperation between
countries.
Development cooperation is with us and has come to stay but
until the average Ghanaian understood and appreciated this,
people would not understand what really controlled the
economy.
"Development cooperation" could be explained thus - every
country wants development and in pursuit of that, one
country could come up with strategies that could affect
another country positively or negatively.
Development cooperation could be positive when all countries
agree that they want to improve the world and start working
towards that goal, perhaps his was one of the reasons that
motivated the Millennium Development Goals by the United
Nations.
In development cooperation, countries do not forget the fact
that some nations are more powerful in terms of the economy
than others because of what a nation is capable of
producing.
Back to the Ghana situation, even though the country
produces cocoa and gold and in sometime to come oil, the
determination of prices on the world market would not solely
be in her power.
The government therefore cannot be in control of oil prices
and therefore the country's economy.
What this piece seeks to do is to encourage governments to
educate Ghanaians on the dynamics of the economy in
relations to the world market as well as the influence of
the International Monetary Fund, the World Bank and the
effects of the Development partners' activities positively
or negatively on the average Ghanaian.
President Kufuor confirmed this in his nationwide broadcast
that the Government was already in consultation with its
development partners to import and stockpile additional
supplies of rice and wheat to enhance food security.
Yes it has to be in consultation with development partners,
who may either benefit or lose if the terms were not well
spelt out. In this instance even though it looks like help,
the development partners also stand to benefit because Ghana
will eventually buy the loads of rice from them.
It is time that governments explain to their citizenry, the
nitty-gritty involved in the international economy and how
Ghana fits into it.
For once Ghanaians should know that it is not how good or
bad a government is that makes it decide to reduce fuel
prices or increase it.
Perhaps by understanding the economics better Ghanaians
would be willing to change their attitudes and work hard to
improve their production capacities in the country and God
willing be able to handle the hardships no matter the price
of oil on the world market.
GNA
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