Mid-year budget review: More hardship coming, Ghanaians should prepare - Fiifi Kwetey

By Mutala Yakubu
Fiifi Kwetey
Fiifi Kwetey

Fiifi Kwetey who was a former deputy Finance Minister under the erstwhile NDC administration says he foresees Ghanaians going through hardship after the 2019 mid-year budget review was presented to parliament on July 29, 2019.

His says the announcement of tax increases in the budget only signifies that Ghana will go through some challenging times.

The 2019 mid-year budget review saw the introduction of new taxes and increment in some existing ones.

Mr Kwetey speaking to Citi Tv said the proposed increase in fuel prices and the communication service tax are major developments that will cause a strain on the finances of Ghanaians.

“The hardship on them is going to increase. For example a gallon of petrol is actually going to see almost 1 cedi in addition. That is massive and it is going to affect everything, not just transport; food is going to be affected. Much more hardship is going to come. In this day and age when you have hardships, Ghanaians take a lot of comfort in going on social media, laughing at jokes and all that and that one as well has now seen an increase in tax,” he said.

He added that “I think generally, Ghanaians need to have massive awakening that our friends have just danced around and today, the reality, they cannot handle.”

Mr Kwetsy also disagreed with the Finance Minister’s suggestion that the John Mahama government had led the country into many power deals with Independent Power Producers that was compelling Ghana to spend about $500 million annually on power it does not consume.

He opined that at the time the government entered into the “take or pay” contracts, there was an actual need for the power and the country indeed used most of the power that was produced since its other source of power such as the Bui and Akosombo hydro dams were under-operating and producing less power.

“At that moment when we were getting these IPPs, the whole hydro side was not in operation. There was a massive shortfall so these were not excess capacity. They [NPP] have been lucky because the level of the Akosombo Dam has come up so now they don’t need as much power as we needed because at that time we actually had no option,” he said.

He also suggested that claims that the John Mahama government poorly negotiated power deals and settled for only ‘take or pay’ option was false since “that was the best we could have done.”