2023 Budget Does Not Inspire Investor Confidence, Says Franklin Cudjoe: “Who Will Invest In This Economy?”

2023 Budget Does Not Inspire Investor Confidence, Says Franklin Cudjoe: “Who Will Invest In This Economy?”

  • Ghana's projected growth for next year is not likely to be realised, according to IMANI Africa's Franklin Cudjoe
  • The policy analyst has said finance minister Ken Ofori-Atta should not have raised taxes in the 2023 budget
  • He said investors are likely to take their money elsewhere because the 2023 budget fails to inspire

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The 2023 budget presented by the finance minister Ken Ofori-Atta on Thursday November 24, 2022, has received negative appraisals from experts and civil society.

Founder of influential think tank IMANI Africa, Franklin Cudjoe, has joined the growing number of experts who believe the government's policy document for next year has not been properly thought through.

Franklin Cudjoe sees tough days ahead for Ghana's economy.
L-R: Franklin Cudjoe and Women selling palm oil in the market in the town of Noe, a border town between Ivory Coast and Ghana. Source: Facebook/@franklin.cudjoe, Getty Images.
Source: UGC

Cudjoe told YEN.com.gh in an exclusive interview that president Nana Akufo-Addo and his finance minister Ofori-Atta, made the worse decision by raising taxes in 2023.

"I wasn’t expecting a hike in taxes; the VAT going up by 2.5%, and that dance around the E-Levy. If you combine both, I think it increases our woes," he said.

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But Franklin Cudjoe is not the only policy analyst who has faulted the hike in VAT and 1% Electronic Transactions Levy charged on every amount of money sent through mobile money and other electronic platforms.

Economist and a lecturer at the University of Ghana Business School, Godfred Alufar Bokpin has expressed similar sentiments. Prof Bokpin says the VAT increase will restrict growth.

2023 Budget Will Stifle Economic Growth Next Year, Says Franklin Cudjoe

Franklin Cudjoe says Ghana is likely to plunge further into an economic crisis if proposals in the 2023 budget are approved by Parliament.

He explained that increasing taxes when all the macroeconomic indicators are in the red was a bad call.

"If you add the tax increases to the fact that inflation is 40% plus, add to the fact that interest rates are almost 40%, and the cedi is depreciated by almost 50% against major currencies especially against the dollar, you ask yourself, who is interested in investing in this economy?" he quizzed.

According to him, the government's projected overall Real GDP growth of 3.7 is not achievable.

"If you consider also that currently government is expected to shave off the interest of bondholders and domestic bond holders not getting any interest and all that, and you get a potpourri of actions that will negate any growth prospects for the economy. I really wonder how the growth, however, minimal can be attained," Cudjoe told YEN.com.gh

He said he expected the president to significantly cut down the size of his government machinery as a more effective austerity measure.

Dr Adu Sarkodie: Economist Urges Ghanaians To Embrace Payment Of New E-Levy, VAT Rates To Restore Economy

Meanwhile, YEN.com.gh has reported in a separate story that an economist has appealed to Ghanaians to embrace the payments of taxes as captured in the 2023 budget statement, and economic policy document of the Akufo-Addo-led government.

Dr Adu Sarkodie said the government is broke at the moment hence Ghanaians should also contribute their quota to bringing the country out of the economic crisis.

Dr Sarkodie said the tax hikes are in interim moves by the government to get the economy back on its feet.

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Source: YEN.com.gh

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