Debt Exchange not the only solution to address economic woes - Dr. Seddoh explains

A former Chief Executive Officer of the National Pensions Regulatory Authority (NPRA), Dr. Daniel Seddoh, has expressed disappointment over the government’s posture as far as the domestic debt exchange programme is concerned.

He stated that the narrative being established by the government, that the economy might crash if the debt exchange programme is unsuccessful is rather untenable.

According to him, once economic activity is going on in the country, it would be untrue to suggest the DDEP is the only solution.

“We should be careful raising that argument except you’re saying that we’ve stopped paying taxes, except you’re saying we’ve stopped generating economic activity,” he was quoted by myjoyonline.com.

“So, one of the issues or the argument we’ve heard from those in government is tax to GDP. And they interpret it as we not paying enough taxes, I do not believe in that school of thought. The real issue for people like me is the quality of the GDP we produce. Now the GDP must generate for you what we call the chargeable income. That is the profit before tax,” he added.

Dr. Seddoh also believes that Ghana’s problems are not about the non-payment of taxes, but instead the mismanagement and inefficiencies of state-owned enterprises.

“But if we’re highly inefficient and we can’t generate profit before tax, we’ll run into the kind of trouble we’re seeing. And most of the entities that are not able to generate profit before tax are state-owned enterprises.

“So, if what the government owns cannot be used to generate profits and then you now come back and turn on those who can work to generate profit, you’re creating a problem that will be difficult to solve. What am I saying?” he questioned.

Dr. Seddoh concluded that “If you look at us, the way we’ve configured ourselves, the financial services, the telcos, even that and probably the oil and gas that’s where the profitability is coming from. So when you descend on those sectors, you’re setting up yourself for failure and we need to pay attention to these things.”

SSD/MA