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08.12.2005 Business & Finance

Government urged to offer support to distressed industries.

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Koforidua, Dec. 8, GNA- The Managing Director of Intravenous Infusion Limited (IIL), Mr Richard Okrah, has urged government to adopt a 'systematic targeting' policy to offer support to distressed firms as part of a larger scheme to empower industries to enable them to play their expected role as the engine of growth.

He said whilst Government deserved commendation for having achieved "the first requirement of sustained macro-economic stability", there was a critical need to empower local firms "through the systematic targeting of distressed industries for support" remained. Propping up distressed companies, he said, was needed to "create the proper conditions for a real industrial take-off in this country." Mr. Okrah made the recommendations when he presented a paper on the likely impact of the 2006 budget on Ghanaian industries at forum organized by the Centre of Budget Advocacy (CBA) at Koforidua on Thursday.

The forum afforded the participants who were drawn from civil society groups, industry and political parties, the opportunity to dilate on the Government's 2006 fiscal and monetary policies and how they might impact positively or otherwise on the citizenry. According to Mr. Okrah, rapid economic growth did not happen by chance but always through deliberate government interventions, including private domestic investment and the development of human capital. He, therefore, suggested a two-pronged approach involving macro-economic stability and direct support to industry as part of a lager gamut of policies that could enable these policies to yield the needed dividend.

Others were the need for increased advocacy activities by concerned sectors, the selective promotion of certain industries whose economic successes could have a major multiplier effect on the people and also the development of the capacity of civil society to monitor and control government programmes.

Mr Okrah described the 2006 budget presentation as "a welcome innovation for industry" in that it could assist them improve in their planning, especially, against the backdrop of some liberalization policies being implemented over the years that had "hit some companies hard."

The effect of some of these policies, he however noted, sometimes ran counter to the objective of job creation, citing the textile and pharmaceutical companies as cases in point.

On the issue of employment creation and poverty reduction, Mr Okrah pointed out that "employment could only be created if industrial concerns are able to sell their products at full cost recovery plus a reasonable margin for growth.

A lecturer in economics at the Koforidua Polytechnic, Mr Benjamin Opoku Acheampong, who also addressed the participants, urged government to invest more heavily in the development of dams and large-scale irrigation projects across the nation. According to him, because the cost of food had huge inflationary pressures on the economy, efforts should be geared towards more local food production through irrigation to ensure an all-year round farming operation.