2024 Budget Overview: Expected Government Spending and Revenue Breakdown | The Big Stories
2024 Budget Overview: Expected Government Spending and Revenue Breakdown | The Big Stories
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NewsTranscript
00:00 Welcome back to the AM show.
00:01 Well, you had the finance minister there delivering the budget in Parliament.
00:08 Isaac Kofieje is with our research desk and he joins me.
00:13 Wasam, break down of the budget.
00:16 Kofie?
00:17 So, the minister has presented a budget.
00:20 What have we been able to gather from it?
00:22 Well, so first of all, let me start with what we are hoping to spend in probably 2024 and
00:31 then what we are hoping to generate as well.
00:34 Because what the minister read in Parliament yesterday is what we call, so the budget comes
00:40 in three forms, Kojo.
00:42 It comes in, the first form is a speech, which the minister reads in Parliament.
00:47 Then we also have the highlights that gives us more or less like a summary of what is
00:53 supposed to happen in that year.
00:55 So you look at the revenue aspects, you look at the expenditure aspects and other, you
01:01 know, constants.
01:02 Then you have the main budget statement and economic policy.
01:08 That is where probably we are all waiting for.
01:10 That's where the meat is.
01:12 The detail of what will happen in 2024.
01:15 Is that what will be presented to Parliament?
01:18 So what the minister, that's a speech, but Parliament will have access to the budget
01:23 with all the appendices and all of those things.
01:28 So what we are learning is that in 2024, government is actually going to base its external sector
01:36 outlook on the debt restructuring at the external level.
01:41 The finance minister said the performance of our external sector will actually depend
01:47 heavily on the debt restructuring that we are doing at the external level.
01:52 To stabilise the CD in 2024, we are going to depend on, you know, key items like the
01:59 Gold for Oil deal.
02:02 We are also going to rely on the IMF support and then also other supports that will bring
02:09 in dollars in 2024.
02:12 And this is actually, if you can go back, what everybody is talking about.
02:19 So the minister says that I want to stress at this juncture that Ghana has paid its dues,
02:27 has turned the corner and getting back on track.
02:31 And if you say you've turned the corner, it comes in different forms.
02:36 So the finance minister spoke about inflation yesterday, spoke about the fact that we are
02:42 slowing down in terms of expenditure and we are hoping to get more.
02:46 The CD is not depreciating like the way it depreciated, you know, the same period in
02:52 2022.
02:53 So that's what the finance minister means when he says that we've turned the corner.
02:58 But we have some 10 key takeaways that I want us to go through.
03:03 So first one you made mention of is the construction of the general hospital.
03:08 Very, very important.
03:09 It's found its way into the budget yesterday.
03:14 And the finance minister said that financing has been secured, funding will be provided
03:19 through the national budget and the contractor, he says, will resume work next week.
03:27 When is next week?
03:28 OK, well, from Monday, we would have our reporters then.
03:32 We would have to check every day to see whether or not the contractor is on site.
03:37 So from Monday, I will be there.
03:39 Then the second one is the sanitary pad tax.
03:42 Very, very important.
03:44 We've been talking about this for a while.
03:46 The fact that now if you are a lady, every month you need to save up about some 50 CDs
03:54 to now afford a sanitary pad and all of those things.
03:57 Very high.
03:58 Governments are saying they are doing something about it.
04:00 They have these taxes that they are considering in 2024.
04:04 There will be a 0% VAT rate and import duty waivers for all materials or locally manufactured
04:10 sanitary pads.
04:11 And that will be implemented in 2024.
04:13 Now, just before we move on, let me acknowledge the presence of our guest, Dr. Michael Ayamga.
04:20 He is a development economist and senior lecturer at the University for Development Studies.
04:27 Doc, good morning and thank you.
04:30 Good morning, Chris.
04:31 Great.
04:32 Pleasure to be with you.
04:33 Great.
04:34 We also have Charles Nyaba.
04:35 He is head of programs and advocacy at Peasant Farmers Association of Ghana.
04:41 Charles, good morning.
04:43 Okay.
04:44 Charles, can you unmute so we can hear you?
04:52 I saw you on there and I know you are there.
04:55 Great.
04:56 Yeah.
04:57 Okay.
04:58 Good morning.
04:59 Good morning to my good brother, Michael.
05:00 Yeah.
05:01 And your good self.
05:02 It's been a while.
05:03 Yeah.
05:04 How are you?
05:05 I'm fine.
05:06 Okay, guys.
05:07 Thank you so much.
05:08 So I'll come back to you shortly.
05:15 But we want to share the bit that we've picked from the budget with our viewers and then
05:20 we'll come to you.
05:21 So yeah.
05:22 Now, let's go to the figures proper.
05:23 I want us to now look at the figures and look at how...
05:25 Have we finished with the 10 key points?
05:28 The 10 key points.
05:29 Okay, we can still go back to the 10 key points.
05:31 We can just run through.
05:33 The third one is the Akosombo Dam spillage where...
05:36 $220 million.
05:37 ...has been made available.
05:38 There's also the African print industry that also enjoys some VAT, a 0% VAT for the next
05:45 two years.
05:46 The fifth one is the night economy where government is hoping to cash in on that one and also
05:52 promote public-private sector partnership.
05:55 There will be the DDP.
05:57 The government says DDP has been concluded.
06:00 Concluded.
06:01 Yeah.
06:02 Simply tells you that we are done with the DDP and what we are hoping now to do is to
06:07 go ahead with the external restructuring.
06:10 Our external sector, just like I said, the finance minister said, number seven, it says
06:16 the external sector's performance hinges on negotiations with external creditors, an IMF-supported
06:22 program and co-co-syndicated loan, continuation of gold for oil program and mining inflows
06:28 and the second tranche of the IMF.
06:30 That will be how the things we are going to use to consolidate our external sector in
06:36 2024.
06:37 There's also the financial sector support.
06:39 We've spoken about NIB and other financial institutions and distressed governments saying
06:44 they are going to provide some $4 billion of support.
06:47 The ninth one...
06:48 I think there should be more explanation because we are not over at the end of that.
06:53 We should be giving more explanation.
06:55 Exactly.
06:56 Especially when we know there's supposed to be a banking sector recapitalization plan
07:00 and all of those things.
07:02 The ninth one is the international funding support.
07:05 So government is actually anticipating that probably by the end of this year they should
07:10 get some $2 billion from the IMF World Bank support and then also the co-co-syndicated
07:17 loan that will come in.
07:19 And the last one that we picked is the fact that total expenditure has actually gone up
07:24 by some 21.3 billion Ghana CEDs.
07:29 Let's go to the figures and look at how much government is hoping to spend in 2024.
07:35 So the projected expenditure in 2024 is 226.7 billion Ghana CEDs.
07:43 We are hoping to raise revenues and grant 176.4 billion CEDs.
07:49 If you do the math, this leaves a difference of 50.3 billion Ghana CEDs.
07:56 And Kojo, if I talk about total expenditure, this excludes ARIES payment or clearance.
08:01 If you include ARIES clearance, you see that our deficits will move from that 50.3 billion
08:08 to over 61 billion Ghana CEDs.
08:10 Exactly, because most of the papers are reporting 61.
08:13 That's if you include ARIES clearance in 2024.
08:18 Now if you also look at where our revenues will come from in 2024, it's important to
08:25 note where our revenues will come from.
08:28 So the revenue of 176.4 billion Ghana CEDs, we are expecting that some 135.9 billion will
08:39 come from taxes and non-tax revenue is supposed to be around 14.8 billion.
08:45 So just see the difference between the tax revenue and other revenue sources.
08:52 So you want to raise 176.6 billion and you are expecting 135.9 billion to come from taxes.
09:02 That's over 77%, right?
09:04 So 77% of our projected revenue in 2024 is supposed to come from taxes.
09:10 So if people don't pay taxes, then we are doomed.
09:13 That's exactly what is happening in 2023 when we hinged most of our revenue collection on
09:19 taxes and we've seen the e-levy not performing well and the target that we set for ourselves,
09:25 we are way below that target.
09:27 Non-tax revenue is supposed to contribute close to some 15 billion dollars to the economy
09:33 in 2024 in terms of revenue.
09:36 This is dollars in CEDs, right?
09:38 So 14 billion.
09:41 Close to 15 billion CEDs in 2024.
09:45 Oil revenue is also around the same place, 15 billion.
09:49 Grants is around 3.12 billion Ghana CEDs and other sources is supposed to be around 7.56
09:57 billion.
09:58 Now, this is important.
10:02 Projected expenditure of 226.68 billion Ghana CEDs.
10:08 Where is this expenditure going into?
10:11 So let's go into the expenditure line items.
10:14 Compensation of employees, which COJO includes wages and salaries, in 2024 is estimated at
10:23 63.68 billion Ghana CEDs.
10:28 That's way higher than what was actually projected in 2023.
10:33 I mean, have you increased the base pay by 23%?
10:36 That is why if you listen to the conversations around how that up to 25% base pay increment
10:44 came about, you appreciate why possibly the finance ministry could have stretched the
10:50 increment about 50%.
10:52 Because if you listen to them, they say it got to a point it took the finance minister
10:56 to come and spread the data and show them that, look, if we go beyond this threshold,
11:01 we'll be in trouble.
11:03 That's why even in the addition out of that 25% increment, they say, let's start guys,
11:08 the first half you get 23, and then the second half you get additional 2%, making a total
11:14 of 25% in the whole of 2024.
11:19 So compensation of employees taking a huge--
11:22 63.68 billion CEDs.
11:23 Of the exact-- that's very huge.
11:26 Now we've not spoken about this.
11:29 Remember that we've done DDEP, which is supposed to give us some fiscal breathing space and
11:35 give us some relief in the domestic debt financing.
11:39 So we've done DDP, we've trimmed most of our debts, and then we have the fiscal space not
11:45 to be doing debt servicing in 2024.
11:50 At both domestic and external levels, in 2024, we are still budgeting that we are going to
11:55 spend close to 56 billion Ghana CEDs on interest payments.
12:02 If I should use just $1 to 10 CEDs, that's around, let's say, $6 billion.
12:09 So $6 billion of what we will generate in 2024 will go into the servicing of loans,
12:18 interest on loan.
12:19 We're talking about the principal or the amortization.
12:23 I don't know if we are going to go ahead to pay this, but it's in the budget and it has
12:27 been written as 55.9 billion Ghana CEDs.
12:31 So if you look at the line items in terms of the expenditure, two line items will catch
12:36 your attention.
12:37 And always they do.
12:38 Salaries.
12:39 Salaries.
12:40 And interest on loans.
12:41 Interest on loans.
12:42 Capital expenditure is an election year.
12:45 Government will be hoping to do more hospitals, roads, and other infrastructure projects.
12:50 It's estimated around 29 billion Ghana CEDs if you convert it to dollars using the $1
12:57 to 10 CEDs.
12:58 Somewhere around $3 billion.
12:59 But is this enough for the sort of infrastructure they want to do?
13:03 People are even saying it's too much.
13:06 Because you ask yourself, do you have that fiscal space to actually accommodate this
13:10 28.72 billion?
13:11 But I'm sure they've done all the computations.
13:14 Yes, yes.
13:15 Yes, yes.
13:16 So you are hoping that revenues will crystallize.
13:21 Coming into 2023, we're hoping that we'll cash out from the oil market.
13:26 Then we go into 2023 and realize that Ebara was selling at around $75.
13:32 It was good and bad in the same sense.
13:36 Good in the way that it did not put pressure on our dollars.
13:40 Our exchange rates.
13:43 Our CED.
13:44 And bad in the sense that governments could not raise more because crude oil was not selling
13:50 above $100.
13:51 It means that you sell more, but you get less.
13:54 So that's why they reviewed the revenue targets.
13:56 Even if you look at the summary sheet, the summary data that the Bank of Ghana released,
14:02 you watch and you realize that revenue, or total exports, in the first eight months of
14:08 2023 declined by some $1 billion.
14:13 We're not even talking about CED, $1 billion.
14:17 If you compare to the same period in 2022, there was a decline of $1 billion.
14:24 And this is the time that we need forex dollars.
14:28 And you have your total exports decline by, we don't get all of it as profits or as revenue
14:34 anyway.
14:35 But the more we export, the more we also...
14:39 Foreign exchange.
14:40 Exactly, in terms of profits and revenue.
14:42 So that's how the figures looking at.
14:45 We're talking about how we are going to stabilize the CED in 2024.
14:48 We are going to focus it on the IMF supported program, the investment that we get from the
14:54 IMF.
14:55 And then also expected inflow from the Cocoa syndicated loan, which Cocoa Board is estimating
15:01 is around $1.2 billion.
15:02 $800 million is supposed to come from syndicated loans.
15:07 And other sources will contribute about $400 million.
15:11 So total, Cocoa Board is expecting some $1.2 billion in the 2023-24 planting or cocoa season.
15:20 We are also looking up to the second tranche of the IMF loan, which is currently conditioned
15:28 on our ability to get that required financing assurance from our external creditors.
15:36 We are hoping to also cash in from the mining inflows and also the continuation of the gold
15:42 for oil deal.
15:43 Government still sees this program as one viable means where they can raise or actually
15:50 save ourselves some forex in 2024.
15:54 We know of the eight tax reliefs that have been introduced.
15:58 We've spoken about some.
16:00 The VAT, the 0% VAT on sanitary pads, the waivers on import duties, on import of electric
16:08 vehicles for public transportation for a period of eight years, and there are others.
16:13 Okay.
16:14 Let me bring in our guests now, and then we'll come back to some of the things that we know
16:18 here.
16:19 Let me start with you, Dr. Ayamga.
16:21 So yesterday we spoke before the budget.
16:24 First, how is your impression about the budget?
16:29 Because you had some expectations ahead of it.
16:32 Now it's been delivered.
16:33 So what do you make of what was presented?
16:35 Yes, good morning to our viewers.
16:38 I outlined what I expected to see in the budget.
16:43 That was something that was going to be post domestic production by way of significant
16:48 reorientation of our taxes.
16:52 And you saw the minister attempt to do that.
16:55 But as usual, typical Honorable Ken Ofureyata was at his tricks again.
17:01 Eventually listed old taxes and then introduced new ones and sell all the other lease and
17:09 the financial express for the frenzy.
17:11 All of them trying to discuss the introduction of new tax waivers, which in reality are old
17:18 tax relief that already existed.
17:21 That had no impact on the economy.
17:24 And you can't introduce new taxes.
17:26 So I thought that yesterday, yes, he presented a budget, but he was very cunning in the way
17:33 he handled the tax regime.
17:35 The gang of three taxes, which is the e-levy, the communication tax, and also what the COVID-19
17:45 levy that we expected them to go.
17:49 They are still in there.
17:51 So you do not say the finance minister has given us tax waivers.
17:57 Let's go to them and let me highlight.
18:00 We'll go there, but can you clarify this for me?
18:02 You mentioned that there was some introduction of taxes that financial analysts, that eluded
18:08 financial analysts.
18:09 Is that what you said?
18:10 Like tax relief.
18:11 Most of the financial analysts were juggling that there are new tax relief.
18:15 And I will just say the first one is extend the VAT exemption on locally manufactured
18:21 African families.
18:22 It's an extension.
18:23 So it's a tax that is already there.
18:27 I want to follow you well so that I can apply.
18:31 So are you saying there were new taxes or there wasn't?
18:34 There were new taxes, but no tax relief in reality.
18:38 If you look at the mix of the aid that he has listed.
18:42 For example, the first one is to extend the existing VAT, which is listed as a new tax
18:48 relief when in reality it already exists.
18:51 You want to extend it.
18:53 Do we count that as a tax relief?
18:56 You are looking at also the way of import duties on electric vehicles.
19:04 And if you want to analyze the impact of taxes, you are looking at the tax relief, the pathway
19:09 to let's say the manufacturing or the production sectors, all the way down to the table, where
19:16 the bread and butter issues are paramount.
19:20 You look at the tax relief that the Honorable Minister mentioned, and you can see them actually
19:27 being the crippling taxes that are crippling businesses and leading to a decline in our
19:34 production and for that matter our export.
19:37 When I spoke here yesterday, I said one of the taxes we want to see go, for example,
19:42 would be the e-living, which has been underperforming, crippling businesses, actually taking us backwards
19:51 in terms of the progress we have made in digital financial inclusion.
19:56 It more or less destroys more than it creates.
19:59 So many of us expected it to go.
20:02 He also mentioned the fact that utilities in particular were something that were crippling
20:08 businesses and if you wanted to look at local production, the cost of business was something
20:13 we needed to look at.
20:15 We didn't see anything on that.
20:16 And also issues of cost of credit, that also didn't feature.
20:21 So if you look at these three things going forward, yes, you've seen tax relief that
20:27 have created a frenzy and we are all talking about them, but in reality they don't actually
20:33 bring anything.
20:34 Talk about electric vehicles.
20:35 I was asking, how does that actually impact on the business of my good friend Colin Samath
20:41 of Bosokai?
20:42 Maybe he said, the Honorable Minister and his friends who would have wanted to drive
20:47 testers and they are creating taxi waivers for them.
20:49 How many electric vehicles are we having to go?
20:52 What is going to be the business impact on that?
20:54 We are telling businesses that if you want to now exist and do business, start importing
21:01 electric vehicles or go to hell.
21:03 That is the typical statement here and I don't think that we should be celebrating electric
21:07 taxes as a key environmental step because we are here destroying mining.
21:14 We haven't been able to handle that.
21:16 Up north here, the forest is being depleted, rosewoods.
21:19 If you go to the Savannah regions and the rest, our forests are being degraded and we
21:25 should be tackling these things, not giving cosmetic tax reliefs in the name of electric
21:30 vehicles.
21:31 You want--
21:32 - But Doc, the world today is fighting what we all call climate change and we've identified
21:40 that electric vehicles are probably the future.
21:45 So if a government brings a tax that will encourage the importation and usage of those
21:51 vehicles, is that not a step in the right direction of promoting, you know, safeguarding
21:58 the environment and the climate?
22:01 - Yeah, I think it is taking a painkiller from a leader instead of an antisocial leader
22:07 and that is the issue here.
22:09 We can address our key climate issues which has to do with the impact of illegal mining
22:17 and also deforestation.
22:19 That is what we ought to address.
22:22 And you didn't see any significant budgetary commitments to cap this.
22:27 You go talking about electric vehicles that you can actually count and sometimes you are
22:31 not telling us that we have to start importing those ones.
22:34 We are talking about alleviating hardship on people here and that is why I call this
22:39 budget a break the poor budget because it is--electric vehicles is a long shot.
22:44 I'm talking about the young person who was sitting there and thinking how that is going
22:48 to impact on the ball of cake that he wants to buy.
22:51 And you can look at all the taxes.
22:53 There is no pathway to helping small businesses.
22:58 Those farmers that now have to deal with input credit because the planting for food and drugs
23:04 is virtually over.
23:06 The introduction of the second phase which replaced input subsidies with the so-called
23:11 smart input credit was actually the land of the end of the planting for food and drugs
23:15 project.
23:16 So living in an area that is an agricultural community where the farmers have been disempowered
23:21 in the sense that they've been made to depend on the inputs and materials that are out of
23:28 their reach now have to take credit for them.
23:31 And you realize that the release we saw yesterday, I didn't see the reintroduction of agricultural
23:39 subsidies directly.
23:40 I want to see subsidies instead of credit because people can't even afford simple seeds,
23:46 let alone want to take credit.
23:48 In the past, we're struggling in the agricultural sector because of the fear of indebtedness
23:55 that many farmers have and do not normally go in for loans.
24:00 Now turning our agricultural subsidy program into a credit program is already going to
24:04 have a significant impact.
24:06 So from where I sit, the mix of taxes that were presented yesterday were actually pandering
24:14 to the interests of the rich, number one.
24:17 The gains in terms of the sanitary park tax, are we going forward or are we going back?
24:22 I remember in 2015, we were talking about free sanitary parks, free.
24:28 Can I actually support that initiative?
24:31 Because we did a randomized control trial.
24:33 So we realized that sanitary parks have significant impact on school performance.
24:39 And we wanted to get there.
24:41 To give that tax relief, that's a gesture, as a tax relief on locally manufactured sanitary
24:48 parks doesn't actually make them accessible.
24:51 They benefit monthly to the individual person that is buying sanitary parks.
24:57 So it's very much not that we shouldn't sit here talking about that.
25:01 I wanted to see concrete steps that will reduce the cost of businesses, boost domestic production,
25:07 decrease the cost of living, which is the key issue here.
25:12 And if you look at the budget inside out, they are not there.
25:16 And we are going on a frenzy discussing aid budgetary reliefs that are loosely connected
25:21 to the day-to-day activities in the economy.
25:24 That is my disappointment with the budget.
25:27 Israel, who is following us from Tehchiman, says, "Can Dr. Ayemga please help me understand
25:34 the new taxes that were introduced?
25:36 Can you list them for me?"
25:37 So that's from Israel.
25:38 Doc, can you do it briefly so I move on to Charles Ndiaba?
25:42 Yes.
25:43 New tax reliefs were actually taxes that already existed.
25:48 And I said, "Why?"
25:54 He said to extend VAT on locally manufactured African prints.
25:55 So it also is being extended.
25:56 And I said the waiver or importation of electronic vehicles didn't actually address the key problems
26:06 in our economy.
26:07 So it means that yours is about reliefs, not new taxes per se?
26:12 Yes.
26:13 And also you see the so-called compression of the 50% VAT to a 5% flat rate on commercial
26:22 properties.
26:23 Again, you are talking of properties here.
26:27 We want to look at just the direct inputs that go into products and services.
26:31 So I said, "Yes, the tax reliefs, they actually do nothing to change the plight of a businessman."
26:37 And I want to ask the question, if he was a businessman listening to the finance minister
26:42 and hoping for a relief that reduces cost of business, enhances competitiveness, will
26:49 he go away saying that my problems were addressed and I'm made better off?
26:54 The answer is a big no to every business person.
26:57 And I think that we have a problem going forward.
27:00 Okay.
27:01 Let me bring in Charles Ndiaba here.
27:02 Charles, you work with farmers.
27:05 And the minister said they are going to remove certain taxes on the importation of raw materials
27:13 for agricultural sector and also agric inputs.
27:16 Where you, did the budget meet your expectation?
27:22 What's your take on the budget itself?
27:24 Okay.
27:25 Thanks so much.
27:28 I think on the tax exemptions on agri inputs, farmers' nourish, seeds, and then medications,
27:38 it's an issue that we keep engaging the ministry, both the Ministry of Food and Agriculture
27:44 and Ministry of Finance.
27:45 I think we met the Ministry of Finance three times, including the minister himself on that
27:49 particular issue.
27:51 If you remember, last year, this time round, most poultry farmers have to actually close
27:57 their operations because they could not procure raw materials.
28:02 And it's around this time, our then minister created the planting for food and job market
28:09 at the headquarters of Ministry of Food and Agriculture to show that food prices were
28:14 cheap, when in reality, there was nothing to show.
28:18 All that was due to cost of production.
28:22 And the inflation, the food price inflation that we experienced in the middle of the year
28:26 and last year, or just cost-push inflation.
28:30 And all was attributed to government taking that waiver that we used to benefit from the
28:36 input duties when you are bringing your agri inputs.
28:39 So last year, for instance, those who were bringing farm machinery, like tractors, their
28:45 price more than doubled, fertilizer price doubled, seeds price doubled, medication doubled.
28:50 So cost of production actually doubled.
28:53 And that affected the efficient application of those inputs in farming, leading to low
29:01 supply.
29:02 So for us, government bringing that waiver back is something that we are very happy of,
29:08 because we've already engaged them and made them to understand that it wasn't a good decision
29:13 that was taken, and it was leading to decrease in food production and supply.
29:18 So on that score, I want to commend the ministry for doing that.
29:24 The second one that I'm actually waiting to see is the 220 million Ghana series two, the
29:32 flood victims of Kusumbu split.
29:36 We've been calling for that.
29:38 I'm only concerned of how the resource is going to be distributed among the flood victims,
29:46 because in the past we had experience of similar interventions which end up not actually benefiting
29:52 the victims.
29:53 The other component on the point 29, where he's talking about restoration of a true minister
30:02 of food and agriculture to allocate additional resources to restore livelihoods of flood
30:07 victims.
30:08 I'm a bit concerned, because if you say you allocate resources, how much?
30:14 At the end of the day, if nothing good, how can we hold you on?
30:18 So if you just make a statement that we are working with the ministry of food and agriculture
30:22 to allocate resources to restore victims of the flood victim, we think that is too vague,
30:30 and then we're expecting to see the specifics.
30:33 Now when you come to PFJ phase two itself, I think my brother actually threw more light
30:41 on that.
30:42 If you look at it, there's no specific allocation to PFJ phase two.
30:49 Government is going to facilitate credit for aggregators to be able to procure seeds, fertilizer
30:57 for farmers.
30:58 And then when they finish, a lot of engagement is going into that, but we are yet to see
31:06 the actual implementation and how government investment is going into that.
31:11 If you look at the whole arrangement, it means that government is only going to play a facilitation
31:15 role.
31:16 And that is also something we are concerned about.
31:20 Now you look at fiscal investment, investment of capital expenditure, which is about three
31:31 billion.
31:32 One would have expected that given the crucial role of agriculture sector, we would have
31:39 seen some significant investment in that area.
31:45 If you talk of irrigation, I have not heard anything mentioned about irrigation.
31:49 I know because of climate change, these days we cannot continue to rely on green fair.
31:56 Last three years, the government launched the construction of Porgo multi-purpose dam,
32:04 and we all know the importance of that dam and how the flooding of Bagri Dam is causing
32:10 disaster in the north.
32:12 That dam was actually going to be in place to address those issues.
32:16 So I was expecting to see at least some allocation to address that.
32:21 That didn't also happen.
32:22 We're expecting to see allocation to address mechanization challenges.
32:27 We keep talking about encouraging the youth to go into farming.
32:31 There's no youth who want to go and be using coal and cutlass to weed.
32:36 Youth want to see how we mechanize our grain storage to take advantage of what we produce.
32:41 There's no intervention in the budget that shows that we are going to encourage mechanization
32:47 of agriculture.
32:48 And that is also another area that we are concerned about.
32:51 Apart from that, I think we are waiting to get a detailed budget to see the specific
32:57 allocation that is going to agriculture sector, because we think agriculture is the engine
33:01 of the economy.
33:02 And if we don't prioritize investment in agriculture, we will still end up at where we were at the
33:09 early part of the year.
33:11 So it means that whilst you're happy about some of these exemptions, there was still
33:17 more that the minister or government could do.
33:19 Now in absence of that, how do we get around the issues involving agriculture?
33:26 For example, you've stated that you wanted to hear more about Pualu Gudam and all of
33:29 those.
33:31 Is there any other alternative government could use to ensure these things are being
33:36 provided for?
33:37 Yeah, so we talk of climate change.
33:41 You see, you cannot talk of addressing climate change by giving tax exemption to electric
33:48 vehicles without talking about real investment in irrigation.
33:53 If you take from a water or tea river, if we were to create smaller dams along that
34:01 patchment areas, where even if the Akustumbo dam is overflown, the water will run into
34:07 that.
34:08 We make good use of that during the dry season.
34:10 That was not done.
34:12 You go to other parts of the country, northern part for instance, you see the young people
34:18 now drilling boreholes and then buying their own water pumps and using to produce vegetables
34:24 supply to all of us.
34:26 We have engaged the Minister of Finance with the tomatoes importers and the producers.
34:31 And we told them clearly what we can do to ensure that we don't need to depend on Burkina
34:36 Faso and Niger for vegetables like tomatoes and onions.
34:39 And we gave them simple tools that we need to do that.
34:44 We just need some mechanical boreholes, water pumps with some small drip irrigation facilities.
34:51 And the excess of 178,000 metric tons of onions that we have to always import from Mali and
35:02 Niger.
35:03 We can produce more than that and that's going to boost the economy.
35:05 So we are thinking that in the absence of huge capital investment on large irrigation
35:11 facilities like the Pol Godam, there's a way for us to support the youth with these mechanical
35:16 boreholes, with water pumps, with just simple, simple drip irrigation facilities.
35:21 And they'll be able to continue to produce the same commodities that we have to import
35:25 from our neighboring countries.
35:26 And we have been engaging them for that and we just hope that there will still be another
35:30 window that a provision will be made to address those issues.
35:35 So a lot more people to have spoken about importation of farm produce.
35:42 So for example, rice and what have you.
35:45 They wanted to hear more of say restriction on a certain percentage of importations.
35:50 Was it one of the expectations that you had?
35:53 And when you didn't hear that, how did it come across to you?
35:57 Yeah, so actually we were, that was the areas we were expecting.
36:02 And we keep telling the government that those are low hanging fruits if you're looking at
36:06 revenue generation.
36:09 Because if you have your farmers who have potential to produce these commodities here,
36:12 and we are willing, but our competitors are hugely subsidized and supported.
36:20 And you allow them to compete with us.
36:23 There's no way we are going to be able to grow or compete with them.
36:26 So for rice and pottery to be specific, I was expecting to actually see imposing more
36:33 taxes on those commodities.
36:35 People always say that if you impose taxes on rice, prices will go up.
36:38 I don't see it like that.
36:40 Once you increase taxes on rice and pottery, and then the revenue generated is invested
36:46 on the rice farmers or pottery farmers, we will be able to compete them.
36:50 Look, we have a number of people who went into rice farming.
36:53 When government in 2019 announced that they want Ghana to become self-sufficient in rice
36:59 production and that they were going to do investment in rice.
37:02 People went there, used their own resources to clear the land, do the cultivation.
37:08 When it came to harvesting, it became a problem.
37:10 Me myself, my 100 acres of rice last two years could have been in Yakba because it was really
37:16 for harvesting.
37:17 I didn't have access to combine harvester.
37:20 So if government were to look at those areas and rather increase taxes and revenue generated,
37:27 you push it into domestic production.
37:29 Even though in the very short run, there might be increase in cost of imported rice, but
37:35 in the medium to long term, you see that there will be stability and the farmers will be
37:40 able to produce more, will generate more jobs for the youth and become self-sustainable.
37:45 So those taxes would have made the local farmers compete with the imported ones, right?
37:55 That's your argument.
37:56 Because the taxes would increase the cost of imported rice while the local rice will
38:00 still be at the same price.
38:01 Then there could be some fair competition.
38:04 You are right.
38:05 Okay.
38:06 You are right.
38:07 And apart from that, that's what I said.
38:08 Apart from that, it's also boosting domestic production and creating jobs.
38:15 And then also releasing pressure on the currency because we don't need to go and change dollars
38:20 to import rice and pottery.
38:22 Okay.
38:23 Dr. Anga, let me bring you in here.
38:27 So I mean, if you listen to Charles, there should be more done in the agricultural sector.
38:35 Now the budget has been presented.
38:37 What can government do to try and find means of correcting the aftermath, the ones that
38:44 they were supposed to touch on but they couldn't touch on?
38:48 Yeah, I think that I expect that Charles can go on the day-to-day issues that was in farmers
38:57 and doing.
38:58 And I think that there's not a lot of justice to that.
39:01 What I think government should focus on is pursuing the agenda of import substitution
39:08 when it comes to rice and rice industry.
39:10 There is no doubt that the rice lobby in Ghana is a very strong group.
39:15 It has far-reaching influence on policy.
39:18 And I remember some time back when they introduced some restrictions.
39:22 It didn't matter of this.
39:24 It was taken off.
39:25 And that is, we don't have to overlook the influence of rice importers in the country.
39:33 We also have to look at the implications of the taxes on our international standards.
39:38 We are in a free world where trade is regulated by the WTO conventions.
39:46 And when we want to impose import duties, we should expect some responsibility from
39:53 the other countries.
39:55 So we need to adopt some clear tactics when it gets to this.
40:01 I have always maintained that there is no reason why a poultry one month old should
40:07 be entering Ghana.
40:08 I mean, it is strange that sometimes the poultry we eat here are five, six months old and you
40:15 don't even know their state.
40:17 So we could use some of these safety requirements to more or less control the importation of
40:24 these things.
40:25 And then you increase the cost.
40:26 Because if you have to slaughter a cow in the UK today and get it here within a week,
40:33 you have to fly.
40:34 That is going to increase its cost.
40:36 And we are still within the conventions.
40:38 And that is what the West is doing to us.
40:40 Our pineapple, our fruit and the rest.
40:43 Nobody tells us not to bring mango, not to bring pineapple.
40:46 They only impose certain regular standards that our farmers and our technology cannot
40:51 cope with.
40:52 And by so doing, you have all the investments in the industry here, right from the food
41:00 companies to the thousands of mango growers folding up and cutting the mango trees down
41:07 again to replant these because the promise of export is not coming.
41:12 So I agree with that.
41:13 We also have to put in some standards in terms of the quality of life and the quality of
41:17 life that enters here.
41:19 From the nutrition and food security perspective, we can impose these things on our life and
41:23 it will bring costs on to anyone who wants to import them in this country.
41:27 And that will give our farmers some relief.
41:30 I often don't want to go on the line that we have to impose taxes because what we do,
41:37 they will also impose taxes back on us and we're going to have some issues to deal with.
41:42 But there are key techniques and tools available to us that we can use to create this competitive
41:51 edge for our businesses.
41:52 Yes, I wanted to see some massive investment, especially in favor of smallholder farmers
41:58 because these groups of people are missing within the tax relief for importation of agricultural
42:06 inputs.
42:07 And sometimes the price transmission mechanisms mean that at the end of the day they get very
42:13 little from these tax reliefs.
42:16 So again, we have to look at that critically.
42:20 Government trying to wash these hands of the provision of inputs directly and facilitating
42:25 their suppliers may only end up enriching a few people.
42:31 And I need not say that in 2016 there was no improved subsidy program that was working
42:38 seamlessly well until the Plan for Food and Drugs came in, brought it, and people who
42:43 should be having oversight responsibility on it became suppliers of their programs.
42:50 So I think that we need to see some incentives that will boost domestic production, provide
42:55 some farmers directly, and then also we use some regulations in terms of safety and food
43:02 standards to tighten the cost of importation so that we can use some space here.
43:10 Doc Michael Ayamga, I'm grateful to you for joining us here.
43:13 It's a pleasure, it's a pleasure talking to you.
43:15 He is a Development Economist and Senior Lecturer at UDS.
43:18 Mr Charles Nyaba, I'm grateful to you that you joined us here on the discussion.
43:23 I hope that next time we'll engage and see the way forward as well, especially in developing
43:28 agriculture.
43:31 Charles Nyaba is the Director of Programs at the Peasant Farmers Association of Ghana.
43:38 Kofi, so I mean, let's wrap up with the little that we were supposed to.
43:44 They were talking about rice and it was interesting because I mean it's some of these things that
43:49 put a lot of pressure on our currency and while they were speaking I tried to look at
43:54 our repository and see if we can say anything about rice.
43:59 So Ghana, for instance, we are the 13th largest importer of rice in the whole world.
44:04 Wow, 13th.
44:06 Rice was the third most imported product in Ghana in 2021 and if you look at some of the
44:12 sources that we, the countries that we import rice from, so every year we give China some
44:19 $394 million.
44:20 In 2021 we gave them $394 million just because of rice importation.
44:28 Thailand took $53.3 million, India $50.9 million, China $21.7 million and Pakistan
44:37 $21.7 million.
44:38 So China has had their $300 something.
44:39 Yes, yes, yes.
44:40 Look at the difference between China and even Vietnam, sorry, and Thailand.
44:46 So Vietnam is $394 million.
44:49 So Vietnam took $300 million.
44:50 Yes, that's the first.
44:51 Vietnam rice.
44:52 The country that we import the most from, followed by Thailand $53 million, India $50
44:59 million, China $21 million and Pakistan is some $21 million.
45:04 And in 2022 the finance minister indicated that if you look at our import bill which
45:09 exceeded $10 billion, some of the products that actually contributed to this, they were
45:15 rice, iron, steel, aluminium, sugar, poultry that they spoke about, oil palm, cement and
45:23 fertilizer.
45:24 These are things that we can actually do them here.
45:27 Exactly.
45:28 For example, I mean rice, I'm in the rice value chain.
45:31 I know how it is.
45:32 If government will try and cut, look, we spend more than $300 million to a country
45:37 just to import rice.
45:38 That's one country.
45:39 Imagine if you give it to farmers in Ghana.
45:41 The jobs we will create.
45:42 Oh no.
45:43 Government should be deliberate like Nigeria did on this rice thing.
45:47 Of course.
45:48 Because we are pushing too much money to India.
45:49 Have you checked the inflation figures?
45:50 Local rice, do you see the inflation?
45:54 More than 50%?
45:55 Look, government, please, in all honesty, we should be ambitious and deliberate about
46:01 supporting the local rice farmers because that is how we can really create jobs.
46:07 I mean we are battling unemployment, aren't we?
46:10 So push more money into local farmers to create jobs.
46:13 Give more money to poultry farmers to create jobs.
46:15 That's how we fight unemployment.
46:17 We cannot continue to send millions of dollars every year to foreign countries to empower
46:24 their farmers, empower their economy and stifle ours.
46:28 I don't know what else do we need to do before.
46:31 I mean because of individual importance of rice, can't we speak to them to say, "Buy
46:36 your rice from the local farmers because that is how we can create entrepreneurs and billionaires
46:41 in this economy."
46:42 I mean it's just not fair.
46:44 But I think you need to calm down.
46:46 No, I've calmed down.
46:48 But I think that we've been playing with this for too long.
46:50 You've been throwing more dollars away.
46:51 I mean away.
46:52 Oh, every year.
46:53 When we can really give money to farmers here in Ghana.
46:56 Well we'll take a break here.
46:57 We'll be back with more.
46:58 Stay on.
46:58 Stay on.
46:59 Stay on.
46:59 Stay on.
47:03 Stay on.
47:04 Stay on.
47:04 Stay on.
47:05 Stay on.
47:06 Stay on.
47:06 Stay on.
47:07 Stay on.
47:08 Stay on.
47:09 Stay on.
47:09 Stay on.
47:10 Stay on.
47:11 Stay on.
47:11 Stay on.
47:12 Stay on.
47:13 Stay on.
47:13 Stay on.
47:14 Stay on.
47:15 Stay on.
47:15 Stay on.
47:16 Stay on.
47:17 Stay on.
47:17 Stay on.
47:18 Stay on.
47:19 Stay on.
47:19 (dramatic music)