Prioritise agric, manufacturing sectors
. And review taxes as well, Captains
of Industry urge Prez Akufo-Addo
From Editorial team
CAPTAINS of industry have tasked Ghana’s new President, Nana Addo Dankwa Akufo Addo to give priority to reviving the productive sectors of the Ghanaian economy, especially agriculture and manufacturing.
They called on the new government to give special attention to the private sector by providing a business-friendly climate that will inure to the growth and expansion of players in the sector.
Chief Executive Officer (CEO) of Dalex Finance and Leasing Company, Mr Kenneth Thompson maintained “the only way to develop this country is for the new government to immediately focus on agriculture and the private sector.”
According to Mr Thompson, the failure to prioritise agriculture and promote the interests of the private sector will fail to deliver jobs and growth in real incomes which are crucial in Ghana’s economic development agenda.
The Dalex boss lamented the importation of items such as pepper, tomatoes yam, plantain, garlic and others into Ghana which could be produced locally. He also reiterated his call for a gradual depreciation of the cedi to make the agricultural sector competitive.
“We ought to produce enough for our own market and sell to import what we’re incapable of producing here and the first step in industrialization is for this country to process what it produces” he said.
Economist, Dr Adu Sarkodie has appealed to the government to focus on agriculture and manufacturing to strengthen the economy. He argued that the move will create employment for the jobless should the agricultural sector be expanded.
As a campaign promise, the New Patriotic Party (NPP) indicated that its management of the economy would see a shift in policy from taxation to production, to relieve the burden on the private sector and boost production.
To realize this shift from taxation to production, the new government is set to remove or slash some taxes.
The Alliance for Development and Industrialization (ADI), an advocacy group which pools entrepreneurs and industrialists under one umbrella has asked President Nana Akufo-Addo to consider new policies for accelerated development beyond what is captured in the party’s manifesto.
According to the group, “the new President should oversee changes in the operating environment for businesses that will make it more private enterprise friendly, and should implement macro-economic policies that will make Ghana more attractive for both local and foreign investment, while significantly improving the living standards of the general populace.
“We hold the view that the expansionary, supply-side driven economic policies mooted by the new government are in the right direction and our members are committed to supporting the efforts of the State in actualizing them for the benefit of all Ghanaians.”
One of the biggest barriers to the growth of the agricultural sector has been access to loans for farming, with banks reluctant to lend money for agricultural purposes. According to the World Bank’s “Agribusiness Indicators” report from 2012, the share of agricultural loans in the portfolios of commercial banks in 2010 was just 6.1per cent.
Association of Ghana Industries (AGI)
The AGI described as refreshing statements from the new President during his inauguration that the private sector in his administration will lead Ghana’s growth agenda.
“The AGI welcomes the new wind that is blowing, where the enabling environment will be created for the private sector to thrive,” its President, Mr James Asare Adjei said.
Industry, he recalled had been told over and again that the private sector was the engine of growth but the private sector had not been resourced to the level that it should be.
The AGI says it is looking forward to seeing the new administration as a matter of urgency work on the reclassification of power tariffs so that industry would not be disadvantaged when it comes to pricing of electricity.
Industry, it maintains has always been subsidizing residential consumers when it comes to electricity tariffs.
According to AGI President, the challenge for the Association has been that businesses especially manufacturing has been producing under capacity because of the high power tariffs.
Welcoming the Presidents’ promise to reduce taxes, Mr Adjei reminded the new administration that the multiplicity of taxes has been highlighted in AGI’s quarterly Business Barometer survey report.
“If the President says he’s going to reduce taxes it’s a move that the private sector and for that matter the AGI is looking forward to,” he said.
The AGI urged the President to remover import duties on raw materials so that productivity will be enhanced.
He further called for the withdrawal of the energy sector levy since according to him, the imposition of the levy has burdened the productive sectors of the economy.
On the cost of credit, the AGI lamented the fact that Ghana stands out as the country with the highest lending rates in and beyond the West African sub region and called for a significant reduction in government borrowing.
“we are hopeful that a decline in government borrowing will bring down the policy rate and affect the cost of credit; beyond this we are looking forward to a medium to long term availability of credit for small and medium scale enterprises”
Mr Adjei explained that short term capital cannot be used to retool the country’s productive sectors, adding “we looking to medium to long term credit that will help businesses to expand and grow.”
He solicited government’s support for the Association’s planned setting up of an industrial development fund, stressing how such initiatives would help SMEs to be able to grow.
General Secretary of the Industrial Commercial Workers Union (ICU), Mr Solomon Kotei wants the new president to reduce taxes to enhance the operations of businesses in the country and make life a lot more bearable for workers.
“For us in labour we will be happy to see a reduction in taxes in favour of both the employer and the employee by way of the PAYE,” he said.
The ICU called on the new administration to diversify the economy, boost investor confidence in the economy and deal with the unemployment crisis.
On energy, the ICU called on the new government to provide Ghanaians with a true picture of the country’s energy situation. The Union was so concerned because of reports of a possible return to power outages in 2017.
“They need to tell Ghanaians the real situation on the ground as regards the energy needs of the country,” he demanded.
According to the Union, government should take a second look at government-quasi institutions such as COCOBOD “where a lot has been agitated about how systems work,” and sanitise those institutions to increase their levels of productivity.
Mr Kotei demanded that the new government after its first 100 days in office should come out with a roadmap to let Ghanaians know how it intends to fulfill its promises.
The ICU boss insisted that President Akufo Addo appoint only quality people into his administration.
“If he places square pegs in round holes it will create a major setback for his government and the country at large,” he added.
Association of Importers and Exporters
The Association of Importers and Exporters urged the new government to refrain from re- introducing the Port Terminal Handling Charges that some shipping lines pushed for its introduction last year. According to its Executive Secretary, Sampson Asaki, those behind the move might attempt to lobby the new government for its re-introduction, hence the government must be careful in supporting that decision since any introduction will increase port charges.
Mr Asaki also called for a review of import levies since it is stifling the businesses of importers. “We know the new government cannot immediately deliver a lot but we want commitment. Import levy for some items which is 35 percent are too high.”
“Importers and exporters are also calling for policies that will support businesses to grow and generate employment,” he added.
Mr Asaki added that government should also as a matter of urgency create policies that will help bring lending rates down.
He also challenged government appointees to eschew arrogance and not to repeat the mistakes of previous governments, adding that “The government must put the right people in the right positions. It must also appoint people who are ready to work and deliver.”
The Ghana Union Traders Association (GUTA) is calling for a good business environment to facilitate the growth of the private sector.
Its President, Barima Dr. Ofori I, said GUTA wants to see a stable macroeconomic environment that will trigger stable exchange rate, lower lending rates and reduce taxes. “Interest rates must come down because 36 percent or more is too high for business sustainability.” We also want to see policies that will help reduce inflation and boost money supply.”
“We also want to see the review of taxes down. We want the 17.5 percent flat rate to be brought down back to 3.5 percent to enable businesses survive. We want government also to scrap the 3 percent special import levy.”
The General Agriculture Workers Union (GAWU) has appealed to the new administration to use policy tools to compel commercial banks in the country to cede a substantial portion of their loan portfolio to the agriculture sector.
According to the Union, the non-existence of such policies is the cause of low investment in the agriculture sector leading to low output from farmers.
General Secretary of GAWU, Mr Edward Kareweh stated that the practice is normal in most advanced countries, targeted at boosting the food baskets of countries.
He lamented that GAWU had made the proposals to past governments but to no avail.
“A certain percentage of the loan portfolio of banks in the year should go into agriculture,” Mr Kareweh noted.
He argued that the banking industry is one of the most profitable, hence can channel funds to the agriculture sector, which is a critical and important sector.
The Association of Bolgatanga, Bongo, Nangodi and Tongo (BONABOTO) in the Upper East Region, has appealed President Nana Addo Dankwa Akufo Addo to prioritize agriculture and tackle climate change to alleviate the poverty situation in Northern Ghana.
According to the group, the poverty situation in northern Ghana could only be drastically reduced when government shows commitment to addressing the devastating effects of climate change and make agriculture attractive through farmer-friendly policies.
It’s National President-elect, Dr Andrew Akolaa, was optimistic that, farmer incentives and subsidized inputs could make the north the food basket of Ghana and alleviate poverty.
“Government should as a matter of priority support the BONABOTO area with the one village, one dam manifesto promise to mitigate the effects of climate change and improve dry season irrigation farming in the area. This will be enhanced by a serious policy on water harvesting.”
Farmers in the area should be supported with adequate credit facilities, good yielding seedlings, storage facilities and subsidized farm inputs as well as ready market to enable subsistence farmers diversify into commercial farming to accelerate the reduction of poverty.
Dr Akolaa called on government to empower staff of forestry commission to arrest and prosecute recalcitrant individuals who indiscriminately fell commercial trees like shea and rosewood trees.
• Domestic players on VAT removal
Domestic Airline operators say they are patiently waiting for the new government to take action on the 17.5 per cent Value Added Tax (VAT) on air fares.
Players in Ghana's domestic aviation sector have since 2014 been lamenting the imposition of the VAT which sent air fares through the roof by about 40 per cent
In spite of new state-of –the art facilities at the Kotoka International Airport (KIA) as well as regional airports across the country, players in Ghana’s domestic aviation sector continue to grapple with high operational costs.
The operators in August last year renewed their call on government to withdraw the tax but the call fell on deaf years.
Spokesperson for the players, Mr James Eric Antwi appealed to President Akufo Addo to improve infrastructure at the country's airports, especially installation of equipment to aid flight operations during bad weather.
BDCs in high spirits over debt repayment
The Chamber of Bulk Oil Distribution Companies (CBOD) says 2016 was one of the worst years for businesses.
Chief Executive Officer of the Chamber, Senyo Hosi lamented that policy inconsistency has adversely affected the business of Bulk Oil Distribution Companies (BDCs).
“Policy inconsistencies and policy abuse have negatively impacted on our business,”Mr Hosi said, “We expect the new government to be a respecter of the private sector and businesses.”
He added that it was the hope of the Chamber that the Nana Akufo-Addo led government will give attention to the private sector and make the business environment friendlier.
“We are very optimistic and bullish that the present government will appreciate issues much better and resolve to solve them,” Mr Hosi noted.
Even though Mr Hosi said the Chamber will soon issue a statement on the debt government owes the BDCs, it is obvious that the CBOD will welcome the immediate clearance of the outstanding debt owed them.
Government is yet to fully pay the over GH₵2 billion owed these oil companies. It has however paid part of the debt.