Gov't to follow advice of powerful firms…to transform economy if…
THE VICE President, His Excellency John Dramani Mahama, has stated that without a public-private dialogue process to recognise micro, small and medium scale enterprises, the government would be left with no other option, than to follow the advice of what he described as the 'most powerful and influential firms', which may not represent the interests of the majority enterprises in the economy.
He said the call to recognise the different actors and levels in the private sector had become crucial, as a result of the global financial crisis, which struck the world in recent times.
Speaking at the West Africa Regional Public-Private Dialogue for West African States international conference in Accra yesterday, Mr. Mahama added that the dialogue would equally help to overcome the emerging challenges from the global financial crisis, as well as achieving the Millennium Development Goals (MDGs).
More importantly, he said, “this dialogue provides the opportunity for the identification of problems, policies, and reforms that can contribute to creating a more conducive environment for private sector development.”
The conference, which ends today, is being organised by the Institute of Economic Affairs (IEA), Ghana, and the Centre for International Private Enterprise (CIPE), USA, on the theme “The Impact of the Global Financial Crisis on West African States: Leveraging Public-Private Dialogue for Development.”
Describing small medium scale enterprises (SMEs) as the most fragile sector and easily affected by the least adversity in the economy, Mahama noted that it rather held the key to resolving “our challenges of unemployment and accelerating growth.”
The rate of inflation, Mr. Mahama recalled, had declined continuously since October last year, with current statistics pegging it at 14.23 per cent, mentioning “we are on track to achieving single digit by the end of the year.
The value of the cedi has stabilised against the major trading currencies. Balance of payments and our international reserve position have improved.”
The Vice President continued that projected increased total revenue and grants for the fiscal year 2010 would depend not only on the tax policy and revenue administration system, but also on overall economic activity.
He outlined the improvement of agricultural productivity, reformed property rights, improved agricultural marketing networks, and increasing access to agricultural credit, as some policies required to reduce the varied constraints on supply response.
The absence of these, according to him, formed part of most sub-Saharan African countries' problems, to diversify the economic structure with increased exports.
Also at the forum, the Deputy Minister of Finance and Economic Planning, Mr. Seth Terkper, argued that the lack of credit facilities from the banks, which were restructuring from the financial meltdown, created bottlenecks in production, distribution, and service delivery.
He advised: “Our reflections at this meeting should not focus too much on the past, because the train appears to be moving on from the station already.” He cited that “a very quick exit from these policies could badly hurt the return to global economic health.”
Touching on the oil discovery, Mr. Terkper said, “we can learn lessons from Dubai and other countries in formulating our growth and investment laws and strategies,” adding that Ghana was planning to pass a Petroleum Revenue Resource Management law, to regulate and channel inflows of revenues into specific expenditures.”
“There are positives such as the increase in global demand and output, translating into increased exports of primary commodities for many developing countries.
The cycle will start spinning again, but we must learn to adopt countercyclical and contingency measures to avoid being swept off our feet again, should the next crisis erupt again,” he emphasised.
According to him, this goal could be reached only through healthy fiscal balances, reasonable reserves, low inflation and interest rates - not fearing they were anti-growth.
“We must strive to meet our convergence criteria towards a single West Africa currency and economy. There are no cheap options left for us,” the Finance Minister said.