Is This An End to Ghana’s Fuel Subsidies?

The Ghanaian government has announced its intention to remove the subsidies on the nation’s petroleum products. Although the date of the implementation of this directive has not yet been announced, it is anticipated to take effect within the present calendar year.

The announcement of this change in Government policy comes at a time when the country is reeling from high utility tariffs, relatively high fuel prices, and widespread cases of fuel shortage. Moses Asaga, the Chief Executive Officer of the embattled National Petroleum Authority (NPA), confirmed this new government  directive  when he spoke on Joy FM’s Newsfile this Saturday.

As reported by myjoyonline.com, the government of Ghana asserts unequivocally that it can no longer bear the petroleum subsidies it implemented in April 2014. This departure in policy will have negative reverberations all across the country, with the proletariat the most affected.

The implementation and subsequent elimination of petroleum subsidies in Ghana is not new to this oil rich West African state. The government of Ghana has enacted these policies over the years in response to social agitation and to pressure by global economic forces.

In an attempt to reduce an astronomical budget deficit, the government of Ghana, eliminated the subsidies on petroleum products in June 2013. These subsidies were however reintroduced in April 2014 and are now scheduled to be eliminated once again within the 2014 calendar year.

We at The Accra Report are not against the government’s decision to be more prudent in its financial directives.  However, we cannot fathom why the government continues to alternate between implementing and then removing fuel subsidies at will.

It is laudable that the government lays some claim to alleviating the economic woes of the Ghanaian people by implementing the subsidization of petroleum products; however, it cannot renege on a policy within months of implementing. This cycle of half-heartedly implementing policies is unhealthy for the nation’s economy.

The government has to make a firm decision on whether it is committed to fuel subsidization or whether it deems it necessary for the people to have an accurate picture of the country’s financial insolvency.  Will Honorable President Mahama be committed to enacting other unpopular policies to strengthen the nation’s economy or will this just be another dog and pony show to ease the pressure the IMF and the World Bank have applied to his administration to reduce the astronomical budget deficit.

It is often necessary and the prerogative of every government to enact austere economic policies to reduce budget deficit; however, the decision to eliminate the subsidies could not have come at a more inopportune time. In the wake of reports about severe mismanagement of a once promising economy and the current NDC ruling government’s inability to service the nation’s debt, this decision will go down as one of the most unpopular directives in the NDC Mahama-led administration.

Do you think that the removal of these subsidies at this time is a laudable decision and how long will the government withstand public outcry against this directive?

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