Ghana Integrity Initiative - Assignment Example

Ghana Integrity Initiative Ghana is located on the Gulf of Guinea and Atlantic Ocean in West Africa; it borders the Ivory Coast, Burkina, Togo, Gulf of Guinea and Atlantic Ocean. The capital of Ghana is Accra, and the largest city of this country is Kumasi. The official language spoken in this country is English; the majority of ethnic groups are Akan and Mossi. Ghana has a democratic government, where the president is John Dramani Mahama and the Vice President is Kwesi Amissah-Arthur. Ghana declared its independence from the United Kingdom in 1957, it then became a Republic in 1960 and the constitution, which is followed in the country today, is of 1992. According to statistics of 2010, the country has a population of 24.2 million and its currency is called Ghana cedi. There are different internal and external problems of Ghana, which are explained below, along with their effects on the country, its economy and people. Internal Challenges and their effects The first challenge which is faced by Ghana is related to its tax collection. The main duty of a government is to play role in developing the country, for the people. In order to achieve this objective, much government faces challenges because of revenue generation. As Ghana is a developing country, it too, faces the challenge of taxation in the form of collecting tax from tax payers. The Ghana Integrity Initiative conducted a study to understand the problems faced by the tax payer and the tax collector. The tax system is faced with challenges because of loss of revenue due to corruption and financial malfeasance; moreover, there is high poverty in Ghana, which makes it difficult for people to pay taxes. There is a leak in the tax system as those who don’t want to pay taxes, adopt creative ways to do so. There is also the issue of how to tax those businesses, which start after 5pm, like alcoholic beverage businesses, food vendors and taxi drivers (Aboagye). The system of tracking down people who are tax invaders also has lope holes, and people like footballers and lawyers, find it easy to evade tax because of such a system. The Minister of Finance and Economic Planning of Ghana, Dr. Kwabena Duffour stated that the country has been self-employed professionals like pharmacists, lawyers, bankers, accountants and engineers, however, the tax collected from them is very low, compared to other income tax payers. This problem impacts the whole society, as if there is corruption in the taxation department or evasion of tax in the professional area, then the government is left with no money to develop the country. It means that they don’t have any sources to build hospitals, make infrastructure facilities better or build schools for the education of the young generation. Small Scale textiles and Garment Sector There a number of challenges which small scale textiles and garment sector in Ghana face. The first problem is the internal capacity problems like there is inadequate capital, which results in lack of raw materials. Due to these two problems, the business of textiles and garment sector is decreasing; these problems are also associated with the smuggling of manufactured textiles from neighbouring countries like Togo and Benin (Jouch & Troub-Merz). Smugglers also smuggle textiles from advanced countries in textiles like India and China and also the import of second hand textile. With so much variety of foreign goods in the market, the local industries are suffering. This problem directly and negatively affects the economy, as the textile workers are unable to create business and have lost their jobs. This increases unemployment and decreases the Gross Domestic Product rate of Ghana. There is a need for an alliance between the small textiles and the garment enterprises, to access capital and advance technologies, for the purpose of selling garments and generating revenue. The government needs to take an action against the smuggling, because it is destroying the economy and the morale of employees working in industries. The Gross Domestic Product of Ghana was reported to be 40.71 billion dollars in 2012. Transparency The third and the most important problem in Ghana, is about transparency. The revenues collected by the government are usually wasted in corruption, thus, Ghana needs a system of transparency. According to experts, there are no policies which compel the assemblies to use revenues generated from taxation, for the benefit of the people of Ghana and this has resulted in a poor management of generated funds (Fm). Perhaps the transparency issue is what discourages the professionals of Ghana, to pay taxes, because they know that their money is not going to be spent on the people, but on the luxuries of the people sitting in assemblies. This increases, the act of corruption and puts a stop on development of the country. External Issues Illegal Immigration As compared to its neighboring countries and its economic position in West Africa, Ghana’s economic and political situation is stable, which makes it an ideal choice for the people living in neighboring nations. Many people illegally immigrate to Ghana, to seek for employment and better lifestyle, and much of the unskilled labor in Ghana is comprised of these illegal immigrants. These illegal immigrants increase the population of Ghana and deprive the local population of employment opportunities. In 2010, the Ghanaian government confirmed that there were 3 million immigrants in Ghana. These immigrants are a problem also because they utilize the country’s resources, they don’t pay taxes from their income and they are more likely to indulge in illegal activities (Foreigners in Ghana). Ghana’s economy faces challenges from fuel and food crisis, droughts and flood which hugely affected the North, financial crisis and global shutdown. Since 2008, the currency of Ghana’s currency has lost its value and inflation has increased by 20%. Ghana also faces the smuggling issue, from its neighboring countries and this issue hugely impacts the economy and the livelihood of people. These issues are not in control of Ghana, and thus, it is difficult for the government to control them. To sum up, as compared to its neighboring countries, the economy of Ghana and its political situation has been stable, but there are rising internal issues like lack of clean drinking water, which need urgent attention. The leadership of Ghana, like the politicians sitting in assemblies need to be more transparent about where they spent the taxes collected by citizens, otherwise the citizens wouldn’t trust the government and wouldn’t pay taxes, like it is happening right now. Moreover, the citizens of Ghana need to ask the government, where the collected taxes are being spent. There is a need for transparency and dedication from the top leadership, otherwise, Ghana’s economy would suffer. Ghana needs to increase its literacy rate, especially women need to be educated and they need to make use of the natural resources, that they are blessed with. Ghana needs proper management of funds and resources and needs a constant watch on their illegal immigration status, because many of the immigrants are a source of increase in crime in Ghana, they waste resources and they grab employment opportunities for the locals of Ghana, as they are ready to work at low wages. Ghana has shown potential in developing its resources and industries, but they need to tackle their financial crisis and food crisis. They must have a hold on their economic situation and need to take steps to encourage and boost their local industries, to increase GDP rate of the country. Works cited Aboagye, Nana. 'Ghana Integrity Initiative'. N. p., 2011. Web. 30 Apr. 2014. Fm, Nhyira. 'Ghanaians Asked To Demand Accountability For Management Of Internal Generated Funds'. 2014. Web. 30 Apr. 2014. 'Foreigners In Ghana'. 2012. Web. 30 Apr. 2014. Jauch, Herbert, and Rudolf Traub-Merz. 'The Textiles And Clothing Industry In Ghana'. Print. Read More