- November 13, 2022
- Posted by: Amos Ekow Coffie
- Categories: Economics, Trade
Economist Prof. Godfred Bokpin has expressed worry about the private sector being crowded out from the benefits of the African Continental Free Trade Area (AfCFTA).
This is due to the unfavorable tax regime in the country.
According to him, the high cost of borrowing coupled with some nuisance taxes are having severe impact on Ghanaian businesses intending to trade favorable under the continental programme, compared to their peers.
Speaking to Joy Business, Prof. Bokpin said unless the current tax regime in the country is reviewed, Ghanaian businesses will struggle to compete under the pact.
‘If you look at our tax basket, it is heavily indirect based. All of that contributes to high production cost of doing business”.
“If you put that together with electricity restrictions on the growth drivers of the economy, Ghanaian private sector has to borrow at a rate in excess of 35% percent…..you can’t compete”, he said
He pointed out that all these challenges are making it difficult for Ghanaian businesses to compete under AfCFTA.
“So you can see the fundamentals and can project how that can affect the Ghanaian private sector and the ability to maximize the participation of the AFCFTA. That’s the point that we are talking about’.
“As it stands now, we don’t get the clear picture and direction that government wants to create the enabling environment that guarantees private sector leadership”, he added.