Make IDIF beginning of industrialisation drive
The demand for Africa’s agro-processed commodities is causing developing countries, including Ghana, to shift capital, labour and entrepreneurship away from informal employment into the industrial sector.
The One-district, One-factory (1D1F) policy in Ghana is one recent stride towards industrialisation on the continent.
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Starting as a campaign pledge made by the current President, Nana Addo Dankwa Akufo-Addo, the policy aims to put a factory in each of the country’s 216 districts within the next four years and transform the structure of the economy from one dependent on production and the export of raw materials to a value-added industrialised economy driven primarily by the private sector.
The President purports that this initiative will create economic growth, accelerate development in the areas where the factories are located and create jobs for the growing youth population.
Underscored in this view is the endorsement of a trickle-down approach where increasing the wealth and capacity of those who are well off will gradually usher in benefits for the marginalised rural poor.
It is in a bid to incentivise the private sector to fully participate in the project and expedite the industrialisation agenda that Parliament gave the Ministry of Finance the green light to grant “considerable” tax exemptions to private businesses that have been enrolled on the government’s 1D1F programme.
A Deputy Minister of Finance, Mr Kwaku Kwarteng, has, therefore, urged companies that are into manufacturing, especially those operating in the countryside, to step forward to present their business plans to receive state support.
“We would like to relate to you and if you are comfortable in this programme, we will tell you what is required of you as a candidate and what incentives are open to you,” he stated.
Addressing a breakfast meeting of chief executive officers (CEOs) of businesses in Accra yesterday, Mr Kwarteng said: “Even though we are granting general permission, Parliament requires us to bring each request to show the economics of the projects or investments that will come to them for exemption.”
The meeting, dubbed: “Ghana on the go”, allowed the captains of industry to assess the benefits and disadvantages of the Exemption Bill 2019, as well as make inputs into the bill.
An incentive package from the government for the operators of the 1D1F programme was earlier met with stiff opposition by Parliament’s Trade and Industry Committee.
The package, which includes tax exemptions, tax holiday periods of up to five years, among other things, was under consideration at the committee level after it had been presented to the House earlier.
The Ghana Investment Promotion Council (GIPC) organised the meeting as part measures to sensitise businesses to the government’s tax reform agenda.
For us at the Daily Graphic, this is a good initiative to drive the process of industrialisation notches higher and realise the successful implementation of a major flagship campaign project.
Again, given that the 1D1F policy is a private-sector-led accelerated industrial development strategy, we must proceed with caution over the wholesale tax exemption policy, so that companies do not hide behind the policy to avoid or evade tax, which is critical for the accelerated development of the country.
We must also set targets for the companies that benefit from the tax exemption policy, so that efficiency becomes the primary goal of the companies.