NPP Government And Naked Capitalism

Tue, 2 May 2006 Source: Adomako, Appiah Kusi

Capitalism would collapse on its own weight because the repetition of business cycles would eventually bring the economy past the point of no return- Karl Marx from Communist Manifesto


Recent developments in the Middle East and Nigeria have caused a spill over all over the world. We are all paying for the misunderstanding between the only surviving super power in the world and an emerging economy-Iran. It is as if today it is America which decides who goes to heaven and who goes to hell. Any nation that does not sing America?s chorus is seen to be singing discord. Now crude oil per barrel has reached a record high of over US$ 72. Analysts believe that the price could go up to about $ 100 per barrel.

This means that we in Ghana would have to pay more for petroleum products. Gone were the days in the PNDC regime when the prime source of revenue to the government was the annual increase in petroleum prices by Dr Kwesi Botchwey in his budget presentation to the state.

With the advent of the New Patriotic Party (NPP) in 2001, the automatic adjustment formula for determining the prices of petroleum products was invented. Then we moved to the enactment of the National Petroleum Authority Act and total petroleum deregulation.

Today the Ghanaian is made to pay for the full price of the petroleum products that he or she uses. Basically there is nothing wrong for allowing somebody to pay for services enjoyed. When it comes to the determination of petroleum prices in the country, government is quick to compare the prices of petroleum products with countries in the sub-region. The irony here is that the government has never compared salary levels maintaining that we cannot afford realistic wages. Today the Ghanaian worker is paid a minimum wage-salary and not living wage. However it would be blatantly hypocritical when the same Ghanaian worker is not been paid realistic wages but he is made to pay for realistic prices for public services. Now we pay for full cost of water and electricity. Most Ghanaians are concerned about making a living than making a life because their take home salaries cannot take them home. And when people are not paid well they would pay themselves through corrupt and other practices.

Excessive application of the capitalism theory by the NPP government must be looked at critically. Ghanaian and African countries are not the same as the already developed nations like US, Britain, Italy, France, Japan and Germany where their economies are integrated and people are able to save money from their toil and sweat.

Now again, the dark clouds of an imminent increase in petroleum prices hangs dangerously low on us. It is understood from theories of economics that there must be an increase in the price of petroleum products in the country. This increase can be averted if the government can reduce the colossal taxes that have swelled petroleum prices in the country. For the first time I am tempted to agree with Wahalians in this respect. We are human beings and we created the formula. The formula was created for our good not for our destruction. The good book says the law was made for man and not man for the law. We should not be like a robot which operates based on its configuration and orientation. Today it appears we find ourselves being drowned in a formula designed by the NPP government and passed by the parliament. Government needs more money through taxes. However when the tax payer is suffocating we do not tie his neck, we rather rescue him. Can?t we do something about the excessive taxes in petroleum products? In the days of the PNDC Economic Recovery Programme (ERP) the Programme of Action to Mitigate the Social Cost of Adjustment (PAMSCAD) was put in place to sooth the cost of adjustment. Now we are told that there is a tax called social impact levy in the petroleum products we buy. This is likened to an anaemic person who is being asked to donate blood to a blood bank.

At least we can operate a two tier formula in determining the prices of petroleum products in the country. In a season of high tide the tax portion is downsized and in a season of low tide we can make use of the other equation. But for one equation to be used at all time is not acceptable. In other words it lacks a human face. God in his wisdom when creating human being put a buffer system in our blood such that we can maintain a constant power of hydrogen (ph) ion concentration. This is more of chemistry but the analogy here is perfect. The basic thing is that human blood is to maintain a constant ph value of 7.4. No matter the amount of acid or base added, the blood system is able to maintain a constant ph value of 7.4. We need to learn lessons from here.

Going back again somewhere last February, new petroleum prices were announced. A new minimum wage was announced. The increase was supposed to take effect from March 1st, 2006. As at now, those workers whose names appear on the government payroll have not seen the blessings of the increase in salaries. In other words the new salary has not been paid. We are told that the they have that the tripartite committee has not finished the deliberations. What kind of fairly tales is this? The same urgency that the National Petroleum Authority (NPA) is able to sit to respond to change in petroleum prices can also be adopted to make sure that workers are given whatever is due them.

We need to look into future and research into how we can break loose from petroleum addiction. This can only be done when we invest in science and technology. It is high time we set our priorities right. Ghana must get a bulwark against crude oil import. Solar energy, wind energy, biomass amongst others present ready alternatives. This is the trumpet of conscience waking us up to action and to the realities of the day.

Appiah Kusi Adomako is an international freelance writer and the president of the Ghana Chapter of Leaders of Tomorrow Foundation. He can be contacted through:
Leaders of Tomorrow Foundation,
P.O. BOX. KS 13640. Kumasi.
Tel 027-740-2467 www.interconnection.org/lotfound
E-mail: appiah@whatsonghana.com

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Columnist: Adomako, Appiah Kusi