Government is prepared to use both prudent judgement and legislation to create a disciplined fiscal environment for industrialisation, Mr Yaw Osafo-Maafo, Senior Minister, has said.
Speaking at the 58th Annual General Meeting of the Association of Ghana Industries (AGI), Mr Osafo-Maafo said it was the responsibility of government to deal with high interest rates, volatilities in exchange rates and high inflation to enable industries to plan accordingly.
“Let me take this opportunity to announce that the Fiscal Responsibility Act, and thereafter Fiscal Responsibility Council are in the offing. These are additional arsenals, which will support existing laws and strategies to create a tidier economic environment for industrialization,” Mr Osafo-Maafo said.
Touching on access to capital, the Senior Minister said there was the need for the stakeholders to work together to improve access to capital on competitive terms to drive industrialisation.
He said access to long-term capital on competitive terms must underpin any meaningful industrialisation drive, adding that, the banking system had not been structured in a way that would respond adequately to the peculiar needs and dynamics of various sectors such as agriculture and industrialization.
“Lending to industries on 2-7 year basis at interest rate in the region of 25-30 per cent is certainly not right for the kind of private sector led-industrialisation we anticipate. There is the need for innovative thinking which will create alternatives to the conventional approach of lending from banks,” he said.
“Industrialisation requires long term patient capital and our financial sector must be re-designed to support long term financing,” he said, and called on industry to explore possibility of raising financing from the capital market as had been done successfully in various countries.
On procurement, Mr Osafo-Maafo said it was in the collective interest of government to use Government’s purchasing power and financial muscle to provide some guaranteed market for products of our industries.
He underscored government’s readiness to serve as an Off-Taker and to continuously increase its procurement of locally produced goods, “let me add that as Ghanaian industries, your prices must be reasonably competitive and do not comprise on quality and standards.”
The President of the AGI, Dr Yaw Adu Gyamfi, lauded government’s effort to support businesses to thrive but said more needed to be done to ensure that challenges affecting business growth were addressed.
Dr Gyamfi called on the government to quicken the pace of the implementation of its flagship programmes, particularly the One-district, One-factory (IDIF).
He said the AGI welcome the 2019 National Budget because it took into account industrial development as captured among the six priority areas.
These include government budgeting One billion dollars for industrial related activities such as 1D1F, stimulus package, export zone development and industrial enclaves.
However, he called for the effective and timely release of the resources for the programmes.
“The AGI pledges to continue working with Government and will be actively involved in ensuring active implementation of this laudable policy,” he said.
The AGM was on the theme: “Transforming the Ghanaian Economy through Industrialization.”