AFAG calls for reduction in policy rate, review of tax to support growth of local businesses
THE Alliance for Accountable Governance (AFAG) has called on the Bank of Ghana (BoG) to reduce its policy rate by half in order to support the growth of local businesses.
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The group also called on the government’s economic management team to make a downward review of the country’s tax regime to create an enabling environment for small and medium enterprises (SMEs) to thrive.
At a press conference held in Accra last Monday, the group observed that the current policy rate of 26 per cent was too high and hampered the growth of the private sector and SMEs.
Unfavourable conditions
According to AFAG, the conspiracy between the government’s unfavourable economic policies and unstable power supply had pushed some businesses to fold up while others had to lay off their employees in order to break even.
The situation, the group said, had not only aggravated the unemployment situation in the country but had also forced some multinational companies to relocate to neighbouring countries.
The General Secretary of AFAG, Mr Arwold Boateng, blamed the high cost of doing business in the country on what he described as “a weak government economic management team.”
“The Vice-President, Mr Amissah-Arthur, in his message during the swearing in of the Governor of the BoG, Dr Abdul-Nashiru Issahaku, said the interest rate regime for the BoG had deepened the challenge for most SMEs to access credit in order to expand. He said the situation had also contributed to the growing unemployment rate in the country and called for a review of the interest rate.
Unemployment
The Vice Chairman of AFAG, Mr Henry Asante, observed that the high rate of unemployment in the country could not be attributed to the high rate of the BoG policy rate alone, but that the increased tax regime played a critical role.
He called on the Association of Ghana Industries (AGI), civil society organisations (CSOs) and the business community to support AFAG in its cause to impress on the government and the BoG to create better conditions for businesses.
The Assistant Secretary of AFAG, Mr Wesley Owusu said the group would continue to explore every available avenue, including demonstrations and legal actions, to put pressure on the government and BoG to respond positively to the plight of the public.