Plucking Featherless Chickens
(From My Archives - Ghana: Plucking a featherless chicken.)
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Introduction: A few days ago, Kenyans took to the streets to protest against their government's introduction of new taxes, especially against basic foodstuffs like bread.
Stunned by the scale of the protests, the government declared a State of Emergency, put the military on the streets, and ordered a crackdown which resulted in many casualties. That was not before the government beat a hasty retreat and shed some of the inhumane imposition!
Kenyan leader William Ruto says he is ready for "a conversation" with citizens protesting against tax increases
Since Tuesday, Kenya has been witnessing thousands of mostly young people protesting against the government's new tax proposals for the country's 2024 Finance Bill.
The legislation includes a 2.75% levy on income for the national medical insurance plan as well as increased taxes on vegetable oil and fuel.
However, after consultations with Ruto, the authorities removed on Tuesday a 16% value-added tax on bread and a new annual tax on motor vehicles from the bill.
On Sunday, Ruto announced that there are initiatives to address youth unemployment and enhance accessibility to higher education in the annual budget."
Source: @sputnik_africa
It will never be known why African governments refused to consider the admonition of the great Economist, Professor Adebayo Adedeji: “Any economy theory that impoverishes people is doomed to failure.”
Once again, I reach into my archives to wake up an old article I wrote about the Republic of Ghana.
Readers, I present to you: You don’t pluck featherless Chickens.
“The government is expanding to meet the needs of an expanding government.” – Graffiti
“You do not pluck a featherless chicken.” – African proverb.
In the article ‘Sitting on Gold and Looking for Money in Condom,’ http://alaye.biz/2013/07/sitting-on-gold-and-looking-for-money-in-condom-taxes/ we lamented the poverty of vision that led the government to think of levying taxes on condoms, yes, common condom.
We wrote, inter alia, “Like the simple issue that it is grossly insulting, even alarming, that we do not have the men and the women in our government that are capable of thinking outside the box. From Tarkwa in the Western to Wa in the Upper West Region, Ghana sits literally and figuratively on gold. And gold is just one of the innumerable minerals in our soil. We have abundant Manganese, salt, bauxite, iron ore, and other minerals. And we have recently joined the ranks of oil-producing nations. Why on earth are we then so bereft of creative ideas that we can only think of making money from condoms?
“Sorry, Femi, but it is exactly those types of jejune arguments that have kept us where we are today. And you and I know that we are solidly at the bottom, at the rung of every measure we use to measure human progress. It is exactly our lack of capacity to think big; our inability to be audacious that is the bane of our lack of progress. It pains me greatly that I live in a country, so richly blessed and yet have leaders sitting down to consider options and all they could come up with are ways and how to raise money from taxing condoms. Our ambitions should be made of sterner stuff, to quote Shakespeare. Tchaah!”
In the month of September, the Public Utility Regulatory Commission (PURC) announced a whopping 78.9% (yes, you read it right, seventy-eight point nine percent) increase in electricity tariff. Water was also increased by over 50 percent.
I don’t know who advised the government on such things, but the increment in prices at such a mammoth rate is not only senseless, it is as short-sighted as it is self-defeating.
Except for very few righteous among us, few people like to pay taxes.
Agitation against taxes has led to wars, revolts, and revolutions. That explains why governments are very careful when they introduce or increase taxes.
Which makes it difficult to understand why the government chose that wicked path.
For one thing, such a monstrous increment at a go (as we say in GH) shows an obvious lack of foresight and poverty of planning.
The argument that without massive increment, the provision of services will ground to a halt is untenable; it only shows that managers have been asleep on the job.
Good management practice requires that managers have short-, medium-, and long-term strategies to cope with eventualities.
Except for the rented mouths of the government or of the ruling party, every other person in our blessed republic knows that things are hard, very hard in the country.
It is difficult to imagine the last time, after the debacles of the 1970s and the 1980s when things were this tough in Ghana.
There is gnashing of teeth in the land, occasioned by a severe lack of cash for both industrial and personal consumption. The cost of living is literally and figuratively killing the people.
No less a personage than the President himself admitted that we have bitten off all the juicy meat and are left with bare bones.
There is widespread unemployment (never mind the statistics government spin-doctors spew out about the imaginary jobs they created on their spreadsheets).
Industrial production is low, with many companies trying to cut costs by retrenching workers. The mines are laying off workers.
The banks are in bad shape as government borrowing left the money supply in dire straits. Every financial institution in the land today complains of serious illiquidity and many are in distress. Many of them complain of low savings and heavy withdrawal, and there have been attacks on some financial houses by irate customers who cannot gain access to their money.
We should add that, given the bad economic outlook, it makes little sense to keep cash in the bank only for it to be eaten by inflation.
And are these the same companies that the government is saddling with monstrous electricity tariffs?
Simple logic suggests that they will only lay off more workers, thereby increasing the rate of unemployment and reducing the number of people who pay taxes.
With few jobs available and fewer being created, sensible economics suggest that the government should be thinking about how to stimulate the economy. And you don’t boost economies by raising taxes, as it is the most serious disincentive to personal and corporate investment.
We are told that government borrowing has skyrocketed to historic levels.
While the Government tells us that the loans have been put into serious investments that will soon yield dividends; opponents argue that the loans have all disappeared into corruption heaven. We will never know as both the government and the opposition are not noted for telling us the truth.
So, now we have a situation where there is little productive venture to yield desired taxes for the government.
What to do?
Unfortunately, rather for the managers of the economy to sit down and think deeply about creative ways to improve productivity, they met and decided on the easiest way available.
They chose to increase taxes.
As we mentioned in the article referred to above, there is nothing wrong with governments employing their sovereign powers to impose taxes, but good economy and simple common sense dictate that this should be done so as not to kill the hen that lays the eggs.
This becomes doubly troubling when governments appear to think only of taxation as a means of increasing revenue.
We should not tax people beyond the limits of their ability to pay. This is not only economically dangerous, but the political and social implications are also things to seriously worry about.
We are pained however that the managers of our economy appear not to realize the enormous damage they do to the economy, by their one-track mindset of exponentially increasing taxes, as the only means of generating revenue.
It is like shooting oneself in the foot.
For example, we have a situation whereby our officials proclaimed loudly the desire to make Ghana the Gateway to West Africa.
A laudable idea by any measure.
But then they proceeded to shoot themselves in the mouth, by making Ghana ports the most expensive in the sub-region.
Can you beat that?
Why do our officials forget that we cannot dream or talk our way into prosperity; we have to plan for it.
Why do they behave like our neighbors are fast asleep and have no ambition to collar the same business or the same direct investment that we are after?
We cannot dream of making Ghana the Gateway when we make it so expensive to do business in Ghana.
Our Togolese brethren already operate a free port. This means that you pay token administrative fees to get your goods out of the port in Lome.
It costs three times as much to clear a car of the same model/year in Tema than in Apapa or Tin Can Island in Lagos, Nigeria.
And we talk of Ghana as a Gateway!
Why are our leaders so myopic that simple business sense seems to escape them?
It’s volume, stupid.
Every alata seller in the market knows that you make more money by charging less from many customers, than by trying to milk maximum profit from a few clients. I don’t know why this simple logic escapes our officials who brandish every manner of university degrees.
I have experienced both the expense and the anguish of clearing goods from the Tema port. There, I saw how containers laden with every description of disused junks from Asia or Europe or America pay a pittance to get cleared, while those of us who brought useful things are made to go through pure hell.
I understand that many of the items in these containers are on the banned lists, yet they get cleared from our ports with ease, and they end up polluting our environment and giving our folks serious, debilitating ailments.
What happens is that when governments become too greedy, the result is that people look for creative ways to beat the system, with the government ending up the loser. The result is massive corruption and the only people that benefit are corrupt officials.
The late president Mills cried himself hoarse at the Tema port where he went to lament the high level of corruption. His appeal for patriotism went unheeded.
A newspaper recently carried a comprehensive report on the extent of corruption at our ports. It was reported how people shunned our ports, sent and cleared their goods and cars at Togo, and found the ways and means (another of our fanciful expressions) to bring them into the system.
No, it is not limited to the small guys as another paper went to town to show how Customs officials collude with big-time importers to auction off sales of goods seized because the owners cannot pay. The paper showed that most often the seized goods are sold to the same importers at less cost than what the government demanded.
So the importer and the customer officials laugh all the way to their banks, while the government receives nothing.
Where is the sense in this?
The reports made very shocking readings, and the greatest surprise is that the government has taken no action to date.
Before we jump up to condemn, we should pause to ask what sense is there in asking someone to pay three times in import duties what it costs to purchase the car.
No, we do not talk of over-aged cars. We talk about commercial buses that could aid in transporting people and goods.
Maybe those officials know what they are doing by creating unnecessary snafus. After all, they get their cut to maintain their lavish lifestyles, and who cares if the state loses out?
Our lives will improve vastly in this country when more and more of us begin to seriously question how things are run by our officials.
A good example is the wage bill that today threatens to bankrupt the nation. How on earth did we allow civil servants to increase the portion allocated to wage bills in our budget from thirty to about seventy percent? Why did we allow the 700 or so thousand civil servants we have running the machinery of government to get over seventy percent of the national cake? How do we intend to build a modern Ghana when we expend seventy percent of our budget on salaries alone?
With all the whopping amount paid, there is no discernible change in the level of corruption from our public officials. The ongoing at The Sole Commissioner on Judgment debt makes sober readings.
Rather than for the government to bring its wage bill to sustainable levels and plug all the massive loopholes in the system; it rather would go borrowing and increase taxes and tariffs to unbearable levels.
Patriotism anyone?
PS: It looks like citizens are borrowing a leaf from our government's way of doing business. When I asked my neighbor, who ran our local store, why she raised her prices, with a straight face she told me, “I have to increase my price because people are not buying.”
It was one of those things that leave you totally flummoxed and renders you speechless.
©️ Fẹ́mi Akọ́mọláfẹ́
Farmer, Writer, Published Author, and Social Commentator
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Our governments throughout every nation on Planet Earth are puppets of corrupt " elites " .
They ( these elites) had and continue to infiltrate world institutions, ngos, etc. Their networks are deep, obscure, nefarious and operating under the guise of benevolence.
The removal of Aricana Chihombori from her post as AU ambassador unceremoniously is a point in mind.
See what is happening in Burkina Fasso, Niger, Mali and you cannot doubt what is possible if visionary leaderships arise in national governments throughout the whole world!
Currently, every government throughout the whole world is mediocre!!
They seriously need replacement, fast. Civil disobedience is the way forward or military push.
No time for pussy footings.