Rebels from Ethiopia’s northern Tigray region have announced that they are releasing more than 4,200 prisoners of war, almost two months after ... they agreed to observe a “humanitarian truce” declared by the federal government.
Here are five of those decisions:
1. Building a national cathedral in Accra
With the economy hit hard by the COVID-19 pandemic coupled with high fuel prices pushing up the cost of living, President Akufo-Addo remains determined to go ahead with his project to build a national cathedral at an estimated cost of $200 million.
Despite the public uproar against the project which is using public land and in the face of poor state healthcare and lack of infrastructure for schools, an advisory board has launched a campaign asking Ghanaians to make a voluntary donation of $16 a month to help finish the cathedral.
Akufo-Addo is on record saying that the national cathedral is a pledge he made to God after his 2016 election victory.
2. Electronic transaction levy
Described as the game changer, the controversial electronic transaction levy, popularly known as the e-levy, was introduced late last year in the government’s 2022 budget statement. The first hearing of the statement led to a brawl among lawmakers on the floor of Parliament.
It remains suspended until Parliament resumes later this month. The e-levy, if passed by parliament, will increase taxes on mobile money transfers, which are used by 40% of adult Ghanaians, according to the latest data from the central bank.
The opposition National Democratic Congress, in particular, and Ghanaians in general, have kicked against the levy saying it will lead to hardships. It would also work against the government’s plans to make Ghana a cash-lite economy. Yet Finance Minister Ken Ofori-Atta defends the e-levy as a necessary evil to boost revenue generation to create more jobs.
3. Cleaning up the banking sector
At least eight banks have had their licences revoked and over 200 microfinance and savings and loans companies were shut down by the government leading to loss of jobs.
The Bank of Ghana (central bank) calculates its clean-up will have cost some GHS10. 98 billion (US$2.1 bn), equivalent to just over 3% of the nation’s GDP in 2019, reports the Oxford Business Group. It said it had to act decisively to save the financial sector from collapse.
Some Ghanaians believe the government was hiding behind the central bank’s clean up operation to target financiers linked to the opposition parties.
4. The Agyapa Gold Royalties deal
When details of the Agyapa Gold Royalties deal surfaced in August 2020, the government said it was an “innovative financing solution” that would leverage the country’s future revenues from gold sales by creating an offshore royalties company to be floated on the London and Accra stock exchanges.
The plan involves assigning a majority of gold mining royalties from all of Ghana’s current industrial gold production to the offshore company and selling 49% of the shares in this company through an initial public offering for an estimated $500mn in cash upfront.
An alliance of 25 civil society organisations criticised the proposed deal pointing to the risks of undervaluation of the country’s gold royalties, the opacity of the deal, and risks of grand corruption involving officials and business people linked to the deal.
After the special prosecutor Martin Amidu assessed the risks of Agyapa, he concluded it wasn’t in the best interests of the country. Following the public backlash, the proposal for the royalties deal was withdrawn from parliament just before national elections in December 2020. But the government is set to bring it back to parliament for a vote again.
5. Dropping the benchmark value policy and raising import tariffs
In 2019, Ghana’s government introduced the benchmark policy in accordance with the World Customs Organisation’s policy of regular review of valuation database. Under the policy, certain commodities are benchmarked to the prevailing world prices as a risk management tool, to reflect the true market dynamics of these commodities. In practical terms this means bringing a country’s trade tariffs into line with its other economic and social indicators.
It also considers factors such as health, the environment, and security as well as protection of local industries. In Ghana’s case, the benchmark value policy on imports meant a 50% discount on import duties on some 44 categories of general goods and a 30% discount in duties on imported vehicles.
Trading groups such as the Ghana Union of Traders Association (GUTA) hailed the initiative as helping local consumers. But the Association of Ghana Industries (AGI) opposed the move, arguing it exposed local manufacturers to unfair competition from cheap imports.
Last year as it faced a serious revenue shortfall, the government decided to drop the benchmark value policy. Although that has been welcomed by the manufacturers, it is strongly opposed by traders, consumer groups and opposition politicians arguing it will exacerbate inflation.
Chastened by this mass opposition and concerns about how galloping prices could affect its political standing, the government has suspended the dropping of the benchmark pending consultations with the wider society.
Understand Africa's tomorrow... today
We believe that Africa is poorly represented, and badly under-estimated. Beyond the vast opportunity manifest in African markets, we highlight people who make a difference; leaders turning the tide, youth driving change, and an indefatigable business community. That is what we believe will change the continent, and that is what we report on. With hard-hitting investigations, innovative analysis and deep dives into countries and sectors, The Africa Report delivers the insight you need.View subscription options