Fall in world crude prices affects Ghana negatively Deputy Interior Minister

The Deputy Interior Minister, James Agalga, says the fall in crude oil prices on the world market has a negative impact on Ghana’s economy.

Speaking on Joy FM and MultiTV’s new analysis programme Newsfile, Mr Agalga justified his assertion by saying that Ghana is an exporter of crude oil and depends heavily on petroleum revenue.

“Oil has become a major export commodity for this economy and so if oil is not doing well on the world market, it affects us adversely. When oil prices are falling, it is not a good sign for an oil producing country,” he asserted.

Crude oil prices have fallen below $30 per barrel on the world market but an energy sector levy introduced by government triggered a 30% hike in prices of petroleum products from January, 2016.

Before that, electricity tariffs had gone up by 59.2% and 67.2% water tariffs from December 14th 2015.

Hundreds of workers across the country protested to register their displeasure with the ‘killer taxes and increases’ imposed on them.

But The Deputy Interior Minister said government does not take delight in imposing taxes on Ghanaians.

He argued that some other factors such as the fall in prices of other export commodities such as cocoa and gold places a huge burden on government which has to find the money for development projects.

He said Ghana no longer gets donor support because of its current middle-income status. According to him, “These and other factors have forced government to ‘look within’ for revenue to run the country, hence the taxes.”

Mr Agalga said the utility companies “will collapse if the prices are not increased- ECG, GRIDCo, VRA have outstanding debts to the tune of about 1.4 billion Dollars – and so we have to find ways of generating money to defray the indebtedness otherwise the companies will collapse.”

However, on the same platform, the Communications Director of the New Patriotic Party, Nana Akomea said the hikes in the utility prices are unjustifiable.

Contrary to what the Deputy Minister said, Nana Akomea argued that Ghana gains more than it loses when the prices of petroleum products fall on the world market.

“We are a net importer of oil so when world prices fall, we gain more than we lose. We are gaining because we import more than we export,” he explained.

He went on to say that “Ghana is not getting donor support because of the reckless deficit acquired in 2012 by the NDC government – not because we are a middle-income country. Indeed, it was only last year that the donors resumed after they have been given reassurance after we went to the IMF,” he pointed out.

Nana Akomea added that Ghanaians have every reason to complain about the huge taxes.

“Inflation is 17% but then the government awarded workers a 10% increment, increase petrol by 27%, electricity by 70%, water by 67% and these increases are going to affect school fees, transport fares and everything.So already the ordinary Ghanaian is suffering because his pay rise is below the inflation rate, he is being reduced to nothing,” he added.

Story by Ghana | Myjoyonline.com| Akosua Asiedua Akuffo| [email protected]

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