Business News of 2014-03-17

Govt proposes another dev’t bank

The government has proposed the setting up of another development bank after over 50 years of the establishment of the National Investment Bank Limited (NIB).

Established in March 22, 1963, NIB was the first development bank in Ghana to promote and strengthen rapid industrialization in all sectors of the Ghanaian economy.

But the Minister of Finance, Seth Terkper who made the proposal maintained that the bank is not living up to expectation.

At the Graphic-Fidelity Economic Dialogue meeting with former Finance Ministers held in Accra yesterday, he suggested that to help address some the challenges regarding capital for local investors, the government and private sector should be thinking about the setting up of a development bank.

Mr. Terkper explained that “a bank that is big enough to go into areas like long term financing of mortgages and others; we do not have that yet, even if we have it, it is not big enough.’’

”We should be an economy which grows its financial sector, its real sector and create jobs so that the graduates we are producing in this country will find jobs,” he added.

Mr. Terkper used the forum which was attended by the captains of industry, policy-makers, civil society organizations among others, to urge the private sector to tone down their over exaggerated expectations of government stabilizing the economy.

He said: “The private sector complains when government taxes it, meanwhile, the Ghana Revenue Authority generates ’barely 13 billion’ cedis to pay the public servants, run the government and also invest in infrastructure.

Sometimes the expectation from even the private sector about what government is capable of doing is very much exaggerated…’’

Mr. Terkper noted that given the nation’s output, government is unable to provide the capital needs of private sector and social interventions in education and health.

The minister said: “Given our output and given our desire to maintain a liberal tax regime that has benefitted us then it means that the private sector has to do more”

A former Minister of State at the Finance Ministry, Dr. Anthony Akoto Osei who shared the podium with Mr. Terkper lauded the government for the removal of subsidies, especially on petroleum products.

“We commend them for beginning the painful process of removal of subsidies; we should depoliticize that, because it is costly politically,’’ he said.

Some of these policies and decisions, he noted would go a long way to help the economy improve and develop.

Dr. Akoto Osei who is the Member of Parliament (MP) for Old Tafo said; “we cannot as a country continue to buy at higher rates and cut down on our prices”.

He also added at that the dialogue that for Ghana to experience growth, the public cannot continue to borrow at the rate which it does in the short term. He said that Ghana’s growth rate is challenged and must be saved.

Dr Akoto Osei asserted that Finance Minister and Ministry must show commitment and discipline in the budget allocation, “… Ministers putting items on the budget that are not in the budget, this is serious indiscipline in every government from Nkrumah down to now,’’