According to Investopedia a Subsidy is a benefit by the government to groups if individuals usually in the form of a cash payment or tax reduction. The subsidy is usually given to remove some types of burden and is often cons ... read full comment
According to Investopedia a Subsidy is a benefit by the government to groups if individuals usually in the form of a cash payment or tax reduction. The subsidy is usually given to remove some types of burden and is often considered to be in the interest of the public. We are not going to drag the issue by going into the types of subsidies, however at the end of this short article we shall state the pro and against views on the matter.
Subsidies are put in place to make the life of the poor a bit bearable. In industry it is to reduce the cost of production, thus we may say that subsidy in the cost of crude oil products also go to reduce the cost of refined crude oil product and their transportation.
It is a fact that U.S. and European Union grant various subsidies to their citizens, from agriculture, industry, education, health, power generation home heating. My Minister of Finance and Economic Planning or any Finance Minister on the continent of Africa would have called an African calling for subsidies on home cooling a lunatic.
Thus you see capitalist economy most of the time do not make sense or is just deprived of logic. Capitalist economy and logic are therefore not bed fellows.
The U.S. and European governments are forcing our governments not to give us subsidies in any form. However the economic fact and not fiction is that there are several free economic zones in Africa producing both agricultural and industrial products for the U.S. and Europe free of tax, the reason why they are named free export zones. The aim of the free export zones is to reduce the cost of the products from those zones for those who consume them. Thus in certain cases a free export zone company has access to free land, building and pay reduced price for utility services.
Thus the economic fact again is that African subsidize the life of the U.S. and European consumer. But at the same time the African is told not to subsidize what he feeds on, cloth, shelter and employ himself (if that employment is not to make a person outside the continent richer). It is also an undeniable fact that we subsidize the cost of production and exportation of agricultural products like cocoa, among others and that that cost is to the Ghanaian.
A Summary Analysis of U.S. crop subsidies from 1995 to 20011 is as follows: 277.3 billion subsidies 1995 - 20011
172 billion in commodity subsidies
46.6 billion in insurance subsidies
37 billion in disaster subsidies.
Crop subsidies are as follows:
Corn S 81,732,909,124, Wheat S 34, 397,010,429, Cotton S 32,306,606,808, Disaster subsidies S 21,400,668,851, Livestock Subsidies S 3,738,593, 629, Quality Incentive Programme S 4,236,372,426.
I am not sure if governments in Africa have subsidies for products that are grown and consumed by their population, rather than those that are exported.
From Wikipedia main arguments for energy subsidies are:
-Security of supply - subsidies are used to ensure adequate domestic supply by supporting indigenous fuel production in order to reduce import dependency, or supporting overseas activities of national energy companies.
-Environmental improvement - subsidies are used to reduce pollution, including different emission, and to fulfil international obligations (e.g. Kyoto Protocol).
- Economic Benefits - subsidies in the form of reduced prices are used to stimulate particular economic sectors or segments of the population, e.g. alleviating of poverty and increasing access to energy in developing countries.
- Employment and social benefits - subsidies are used to maintain employment, especially in periods of economic transition.
Main argument against energy subsidies are:
- Some energy subsidies counter the goal of sustainable development, as they may lead to higher consumption and waste, exacerbating the harmful effects on energy use on the environment, create a heavy burden on the government finances and weaken the potential for economies to grow, undermine private and public investment in the energy sector.
- Impede the expansion of distribution networks and the development of more environmental benign energy technologies, and do not always help the people that need them most.
- The study conducted by the World Bank finds that subsidies to the large commercial businesses that dominate the energy sector are not justified. However, under some circumstances it is reasonable to use subsidies to promote access to energy for the poorest households in the developing countries. Energy subsidies should encourage access to the modern energy sources, not to cover operation costs of companies. In the study conducted by the World Resources Institute finds that energy subsidies often go to capital intensive projects at the expense of smaller or distributed alternatives.
What the Minister of Finance and Economic Planning told Ghanaians yesterday at the television discussion concerning the transport industry was like feeding us with a chicken which egg has not been laid by the hen.
Can we enhance biogas, wind and solar energy to diversify our energy generation. Introduce electric railway, tram and buses that will depend on solar energy, and to repeat the biogas issue enable the KVIPs in the villages to produce gas for cooking and lighting. That will help us reduce the importation of crude oil and its biproducts.
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14000000 copies of the best dissertations and project works by Thesis Writer In Ghana.
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FOOLISH NDC THIEVES
According to Investopedia a Subsidy is a benefit by the government to groups if individuals usually in the form of a cash payment or tax reduction. The subsidy is usually given to remove some types of burden and is often cons ...
read full comment
14000000 copies of the best dissertations and project works by Thesis Writer In Ghana.