President Nana Addo Dankwa Akufo-Addo has reaffirmed the commitment of his government to address the issue of fuel price increases in the country, saying, however, that scrapping taxes on petroleum products will reduce government revenue by some GH¢4 billion.
That, he indicated, would not be sustainable in the long run, adding that the government is determined to expand its revenue base in order to increase the country’s capacity to finance her own development.
The President gave the assurance over the weekend when he addressed workers during the 2022 May Day celebration on the theme “Protecting Jobs and Incomes in The Era of COVID-19 and Beyond”.
“On the vexed matter of petroleum price increases, the suggestion that has been made, which has also been alluded to by the Secretary-General, is, at this moment, not a sustainable one. We can’t afford to reduce tax revenues by GH¢4 billion.
“Government is currently confronted by very tight financing conditions, in the wake of inadequate domestic revenue mobilisation. Indeed, some of the revenues from these same taxes on petroleum products are what is used to pay some of the salaries of some of the 700,000 public sector workers on Government’s payroll,” he said.
He assured Ghanaians that his government is determined to work with all stakeholders to see the country through the current crisis, and all the challenges it had brought in its wake. He added his government would continue to demonstrate the ability, resolve and determination to change the trajectory of the country’s economy in order to help it recover faster from the effects of COVID-19
Stabilising exchange rate
The President said government is implementing measures that are succeeding in stabilising the exchange rate, a key determinant of fuel prices, stressing that “Government is also working hard to ensure reliable supply and availability of petroleum products”.
This, he said, would contribute significantly in preventing shortages, a phenomenon which is being experienced in some other neighbouring countries, adding that “by the same token, we are keeping the lights on in Ghana”.
President Akufo-Addo also reminded Ghanaians that although Ghana is a modest producer of crude oil, with a current output of 148,000 barrels per day, the country is still a net importer of petroleum products.
This, according to him, continues to make the country vulnerable to the price volatilities of the world market for petroleum products.
“Nonetheless, intense efforts are being made to rehabilitate the Tema Oil Refinery, to enable it contribute to stabilising petroleum prices, which should see the light of day very soon. We are also encouraging private companies to establish refineries in the country, one of which is 80% complete, and is expected to be commissioned before the end of this year,” he disclosed.
He emphasised that such is the surest way to address the concern because government cannot take adhoc measures that will only give temporary reprieve, and only aggravates the situation even more in the medium to long-term.
“As much as possible, let us use existing institutions and sustainable measures to address these concerns. With respect to emoluments for Article 71 office holders, which, according to official data, constitute less than 1% of tax revenues, we have to deal with issues of equity within our constitutional framework, and call for the collaboration of the Executive and Legislature to address the issue,” he added.
The President expressed the optimism that Ghana would, again, as happened in his first term, be a shining example to the rest of the world, adding that “we are definitely on the right path, as outlined in the GH¢100 billion Ghana CARES “Obaatan Pa Programme”.
“Government’s historic GH¢10 billion YouStart Programme, to encourage youth entrepreneurship, will be launched by June,” he revealed, assuring that it would help transform, revitalise and modernise the economy to enable it return to high and sustained growth over the next two years.
“We are doing so with greater urgency to create job opportunities in different sectors of the economy. We have done it before, and we will do it again. I shall be more than ready to share the progress with you a year on,” the President stated.
He urged all workers and the business community to help sustain the rebound of the economy, and, thereby, help improve the living standards of all Ghanaians.
“We must not lose sight of our overarching vision, which is to build a Ghana Beyond Aid. I remain confident that we can free ourselves from a mindset of dependence, aid, charity and handouts, and build a self-reliant economy which will mobilise the immense resources of Ghana, material and human, with women and youth in the forefront, to resolve Ghana’s problems, and deliver a decent, dignified standard of living to the working people of our country,” he added.