Could This Nana Addo Plan Stimulate The Economy

Editor's Note: This is the first of a 10-part series looking at issues critical to entrepreneurs this election season.

The economy is not dead - it is on the rise. It added fewer jobs than economists expected - it's sluggish and not about to run a triathlon any time soon.

The last seven-plus years have been an economic horror show for the Ghanaian working and middle classes. Costs have gone up while income has lagged making the Ghanaian Dream but a dream for many. But Nana Addo's newly unveiled economic policies could change all that.



As president, Nana Addo indicated that he would slash the corporate tax rate to 20 percent from 25 percent. He would eliminate regulations that hampered the free market and trim government spending to a lesser percentage of the gross domestic product, down from the current percentage.

We quote: "eliminating the Special Import Levy; abolishing the 17.5% VAT on imported medicines not produced in Ghana; abolishing the 17.5% VAT on Financial Services; abolishing the 17.5% VAT on Real Estate sales; abolishing the 17.5% VAT on domestic airline tickets; and reducing VAT for micro and small enterprises from the current 17.5% to the 3% Flat Rate VAT introduced by the NPP” will be done to boost business activity in the country.

Corporate income tax which has stood at 25% for the last 8 years, he said, will be reduced further to 20%. The process of reducing this tax, according to Nana Akufo-Addo, was initiated by the Kufuor administration when it reduced corporate income tax rate from 35% to 25% by the time it left office in January 2009."

Read the full plan on Peace Fm


Nana Addo embraces the tax cutting and regulation-slashing mantra of NPP hero John Kufuor, by pledging to cut company tax to 20 per cent.

There is at least one big problem with this economic policy.

So far he has failed to detail spending cuts to pay for huge tax cuts, infrastructure investment, military spending, etc.

His big tax reductions could blow a multi-billion cedi hole in the budget deficit.

Economists are split over whether Nana's tax and regulation slashing plan would be a boom for the economy and shares on the stock exchange, or if his fiscal irresponsibility would plunge Ghana into recession and deeper budget deficits.

Nana Addo's plan is to get the government out of business, because the private sector has the economic muscle to create the millions of jobs needed.

His plan would undoubtedly be good for businesses, and it would encourage many that have left the country to return.

But where would the lost tax revenue be made up?

Nana Addo is promising change, and many of his proposals sound good, but there are also some areas to be concerned about.

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