Govt on top of economic challenges - Osafo-Maafo
The government has conceded that the economic challenges confronting the country are daunting but has given its strongest assurance yet that it will surmount them and propel the nation to economic prosperity.
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The Senior Minister, Mr Yaw Osafo-Maafo, who gave the assurance, said the government would work assiduously to lay the foundation for economic growth and boost employment creation, one of its key manifesto pledges.
The minister was speaking at the first in the series of the 2017 Graphic Business-Stanbic Bank Breakfast Meeting in Accra yesterday on the theme: “A public-private dialogue on stability, growth and jobs”.
Speakers at the meeting included the immediate past Vice-Chancellor of the University of Ghana, Prof. Ernest Aryeetey, and the Director of Research at the Institute for Fiscal Studies (IFS, Dr John Kwabena Kwakye, and Chief Executive Officer of the Private Enterprises Foundation (PEF), Nana Osei Bonsu.
The meeting was aimed at stimulating discussions on how the country could restore macroeconomic stability to help inspire growth and job creation.
Mr Osafo-Maafo said the task was very daunting but the government was on top of the problems, adding that it had already identified some solutions and would continue to find more solutions to the numerous challenges it had identified.
Private sector
As part of strategies to overcome some of the challenges, he said, the government would create the enabling environment for the private sector to thrive and properly position the sector to support the government’s efforts at stabilising the economy.
He identified financing as the biggest challenge of the private sector, adding: “Not just financing but medium and long-term availability of funds.”
Therefore, he said, in creating the right environment for the private sector to thrive and be able to support national development, the government would facilitate the availability of medium and long-term credit for the sector.
On job creation, the Senior Minister said the government believed that job creation was largely the function of the private sector, but he was quick to add that the sector needed the enabling environment to create the jobs.
He noted that the government was committed to creating that enabling environment through the implementation of effective policies.
“The New Patriotic Party (NPP) believes that creating jobs belongs to the private sector and that is how our policy directions are going,” Mr Osafo-Maafo said.
In his view, creating jobs in the public sector was not the way to go, adding: “We cannot create jobs in the public sector but the government will provide the relevant incentives for the private sector to create the jobs.”
In its effort to facilitate the creation of jobs in the private sector, he said, the government would gradually review the tax system to ensure that “by the drafting of two or three budgets, we would have removed those taxes we referred to as nuisance taxes, as we promised, to create the room for the private sector to thrive”.
He said the government, in the 2017 budget, would abolish taxes such as the special import levy and the five per cent tax on real estate and reduce the 17.5 per cent VAT on small and micro businesses to a flat three per cent.
“We are going to remove the taxes; we will reduce some and bring some," he said, adding that “the government will introduce a lot of measures to maximise revenue”.
Immediate job creation
Mr Osafo-Maafo said the government would not leave the whole burden of job creation on the private sector, saying it had identified two broad areas it would explore to create jobs immediately.
“They are agriculture and industrialisation. The problems facing agriculture in the country are very simple ones but, somehow, the solution has escaped the country for a while,” he said.
He identified some of the challenges facing agriculture as inadequate modernisation, post-harvest losses and lack of value addition and said the government would address those challenges to restore the sector as the mainstay of the economy.
“The solution is not rocket science and we will do it. We will ensure available and accessible funds at very reasonable rates for the agricultural sector to revamp it and restore it as the mainstay of the economy,” he said.
On industrialisation, the minister said the Ministry of Trade and Industry, in collaboration with the Association of Ghana Industries (AGI), had been tasked to immediately identify 100 industries that were facing challenges, so that the challenges would be addressed as soon as possible to make them viable to employ more people.
He said the government had set the parameters for the one district, one factory promise to facilitate its implementation in the next budget to be read in March 2017.
Mr Osafo-Maafo explained that the initiative was to decentralise industrialisation to create more jobs outside the capital city to curb the current rapid urbanisation which was not helpful for economic development.
He said the NPP won the elections on promises such as the one district, one factory and the creation of jobs and, therefore, the government would work to fulfil those pledges.
He said the next budget and subsequent ones would gradually set the parameters for the implementation of the NPP manifesto promises.
Economic stability
Mr Osafo-Maafo described the estimation of Ghana’s economic growth at an average of 5.8 per cent for the next 25 years as too low, considering the performance over the years.
“In 2001, growth was 3.6 per cent without oil. It jumped to 9.1 per cent in 2008. So if we recorded such an appreciable growth for eight years without oil, then it is wrong to average ourselves at 5.8 per cent for 25 years,” he said.
Ghana, he said, had the capacity to grow at a better rate of close to 10 per cent as the years go by and we must work diligently towards that.
He said the government would definitely deliver the economic stability it had promised without compromise, but was quick to add that it would be a gradual process.
The Senior Minister also said the government would go through with the IMF programme which it inherited until it ended on March 20, 2018 because it was not advisable to abrogate the programme abruptly.
Contributing to the discussion, Nana Osei Bonsu said experience available at the private sector showed that the government's one district, one factory policy was "feasible, doable and relevant".
Nana Bonsu, whose PEF comprises eight umbrella bodies of business associations, said the one district, one factory policy was needed to help stem unemployment and boost the capacity of the private sector, while growing the economy.
In his welcome address, the Director in charge of Newspapers at the Graphic Communications Group Limited (GCGL), Mr Yaw Boadu-Ayeboafoh, encouraged the public to patronise the digital platform of the company which had been tailored to meet the needs of the various sections of the public.
He expressed the GCGL’s gratitude to Stanbic Bank for the partnership and expressed the hope that the collaboration would grow stronger to facilitate more economic discourse.
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