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16.04.2007 General News

Ghana fails key growth goals for First Quarter

By myjoyonline

Government has failed to implement some key policy initiatives scheduled for the first quarter of 2007.

The policies, aimed at accelerating the pace of growth in socio-economic development, include the National Identification System, VAT Clearance Certificate, Golden Jubilee Bond and the International Financial Services Centre, among others. They were supposed to be fully implemented within the first quarter. Additionally, other key policy initiatives also planned for realisation within the year have not been initiated yet.

The National Identification Project is to address most of the issues of national concern including reliable data for national planning, poverty reduction programmes, control of fraud and school enrolment planning.

It is further aimed at bringing sanity in the issuance of passports and drivers' licences, identification of customers at banks, disaster management and electoral purposes. Having already established the National Identification Authority, government had planned to begin mass registration in March this year.

President J.A. Kufuor told Parliament during the State of the Nation Address in February that the implementation of the National Identification System had reached a critical stage.

Given the sensitive and security concerns associated with the system, the President said a new bill would be presented to Parliament with a view to regulating the processes associated with its implementation.

Unfortunately, Parliament - currently on recess until May - failed to do so. According to Professor Dumor, Chief Executive of the National Identification Authority, the draft bill is now before Cabinet.

VAT Clearance Certificate (VCC) was proposed under the 2007 Financial Policy Statement to facilitate efforts of the VAT Service at ensuring full compliance by taxpayers. Its introduction is also consistent with international best practices and this, according to the Minister of Finance and Economic Planning, Kwadwo Baah-Wiredu, will be issued to VAT registered businesses in good standing on application from the first quarter of 2007.

"These certificates will have a validity period of 6 months and will be used, for example, as passes by businesses in activities such as competitive tendering and clearance of goods at the ports," the Minister said.

The Commissioner of the VAT Service, Anthony Ewereko Minla, in a recent interview with BusinessWeek said that measures had been put in place in anticipation of rolling out the clearance certificate within the first quarter.

However, the take-off period had to be moved to the end of the second quarter due to some legal constraints that needed to be addressed.
He said initially, the Service was of the view that some provisions in the law could have helped the implementation of the VCC without resorting to any amendments of the VAT Law (Act 546).

"Unfortunately, the provisions do not make it compulsory for people to produce the VCC on clearing goods at the ports and having access to other related facilities," the Commissioner observed.

He also said a draft of the proposed amendment was being put together by the legal team of the Service before being forwarded to Parliament through the Attorney General's Office.

In the case of the International Financial Service Centre, government is aiming at its establishment to enable Ghana to provide specialised financial services for off shore customers in areas of banking, insurance, securities, leasing and other non-banking financial services.

Again, in his last State of the Nation Address, President Kufuor noted that the centre would further the policy of making Ghana an international financial hub.

After initial delays, the Banking (Amendment) Bill 2007 was laid before Parliament in March and that too, must wait till the house resumes sitting in May.

The Golden Jubilee Bond is to provide an opportunity for all Ghanaians, including those in the diaspora, to be part of Ghana's development. The proposed bond is targeted at raising the cedi equivalent of US$25 million for landmark infrastructure projects.

The retail bonds were supposed to be sold especially around the period of the Jubilee celebration to individuals throughout the country with all financial institutions invited to participate in the distribution.

However, sources at the Ministry of Finance and Economic Planning disclosed that proposals on the bond had been sent to Cabinet with a view to issuing them during the second quarter of the year.

Analysts however say considering the bureaucratic nature of government policy implementation, the Golden Jubilee Bond and other key policy initiatives may not be realised during implementation period of the 2007 budget.

Credit: BusinessWeek

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