FOSDA Joins National Inequality Movement
FOSDA has joined A National Inequality Movement, a platform constituted to mobilize civil society to contribute to addressing inequality in Ghana. The platform was constituted at a 2-day advocacy planning workshop organized by the West Africa Civil Society Forum (WACSOF) Ghana National Platform with support from OXFAM-IBIS from 14th -15th of February, 2017 in Accra.
The workshop, which was organized as a follow up event on a study commissioned by OXFAM-IBIS titled “Fiscal Policies to Tackle Inequality in Burkina Faso, Ghana and Sierra Leone,” discussed issues relating to inequality in Ghana and explored solutions to those issues.
The study revealed that ‘Ghana was averagely unequal among African countries’ and must do more to fight inequality in the country. Ghana Government’s spending in education and health, for example, has decreased marginally over the last three years from 18% in 2014 to 17% in 2016. Health spending decreased from 11% in 2014 to 8% in 2016 while spending in education decreased. With regard to social protection, Government’s spending in recent years stands at 2.3% below the AU Windhoek threshold of 4.5% of GDP.
The study also indicates that regressive tax system such as indirect taxes tend to deepen inequality. However, Ghana still collects 55% of its tax revenues from indirect sources (eg VAT, excise duties and custom duties).
It also revealed that Ghana spends more than half of its budget to service debts. In 2015 Ghana spent 61% of its budget on debt servicing. This affects spending in pro-poor social services required to reduce inequality
According Mrs Theodora William Anti who represented FOSDA at the workshop, ‘these revelations are threatening because inequality breeds all kinds of threats to personal and national security and we all must make deliberate efforts to ensure that inequality reduces in compliance with the UN Sustainable Development Goals.’
The Participants proposed the following solutions to address the inequality situation in Ghana
- Health spending must be increased from 8% to 15% in line with the 2001 Abuja Declaration
- While education spending is impressive compared to spending on health, Government can still strive to increase education spending beyond the current 17%
- On social protection, Government should increase spending from the current 2.3% to the AU Windhoek threshold of 4.5% of GDP.
- Government should increase revenue collection from direct taxes (eg corporate tax, personal income tax, taxes in the extractive industries)
- Government, in collaboration with CSOs and the media, should embark on rigorous tax education.
- Government should renegotiate the terms of the loans repayment in order to free up funds for spending in social services