The Chief Executive Officer (CEO) of the Ghana Chamber of Commerce and Industry (GCCI), Mr Mark Badu-Aboagye, has called on the government to spell out pragmatic measures in the 2016 budget that will help revive the ailing economy.
In an interview with the GRAPHIC BUSINESS in Accra, Mr Badu-Aboagye said policies to stabilise the local economy would go a long way to create a conducive environment for businesses to thrive.
“Industry expects to see the budget outline policies that will help provide more financing for the private sector to enable it to play a leading role in the progress of the economy,” he said.
Mr Badu-Aboagye, whose outfit has already made inputs into the budget, said he expected to see interventions that could support the private sector with credit and reasonable interest charges.
“The private sector expects that instability in the exchange rate that has fuelled marginal inflation will be corrected to impact on the policy rate of the Bank of Ghana,” he said.
That, he said, would enable the private sector to unleash its potential and play a leading role in job creation and improve the production base of the economy, especially when the economy would continue on the path of austerity to correct the fiscal slippages of the last few years.
“If the private sector is, indeed, the engine of growth, as our past and present governments have made us to believe, then it needs oil to keep it running,” he added.
In a related development, the General Secretary of the Industrial and Commercial Workers Union (ICU), Mr Solomon Kotei, said: “Given the high level of public debt, there is an urgent need for a well-grounded fiscal framework to anchor fiscal policy and guide towards the achievement of the medium-term objectives.”
“The fall in the prices of the country’s export commodities and the resultant potential loss of foreign exchange and revenue to government may also continue for the rest of the year,” he said.
According to him, bringing down the fiscal deficit would require taking strong measures to enhance domestic revenue mobilisation and plugging revenue leakages arising from exemptions, under-invoicing, transit goods, auction of confiscated goods, among others.
The real challenge, Mr Kotei, said was whether the government would be able to demonstrate fiscal prudence in the run-up to the 2016 elections.
Going forward, he said, the budget must be able to strengthen export diversification to improve the trade balance and generate more foreign exchange to support the economy.
He said it must outline a clear strategy to expand businesses and ensure that they got access to credit and domestic and international export markets, reduce business risks and the soaring interest rates and create the conducive business environment required to support the development of the sector.
According to him, to transform the economy through diversification would require significant infrastructure investment and hard work to remove the main blockages to growth, mainly lack of affordable financing, as well as inadequate electricity supply.
He added that to sustain high growth rate targets, the government would have to scale up investment spending, accompanied by significant private sector participation.
Mr Kotei said economic indicators showed that almost all the key microeconomic indicators did not appear to support the government’s view that the micro situation for the rest of 2015 would improve.
“High interest rates, the rapid depreciation of the cedi, the deregulation of petroleum product prices, the upswing in the rate of inflation are likely to remain for the rest of the year,” he said.
According to him, one of the key areas to look forward to in the 2016 budget was government’s spending plan for next year, an election year.
Mr Kotei said the ICU was of the view that the 2016 budget should outline the government’s ideology but not the whims and caprices of the International Monetary Fund (IMF), adding that the union would resist the 100 per cent utility price hikes proposed. — GB