Business News of 2014-05-15

‘No IMF agenda yet, we’re preparing home-grown strategy’

The President, Mr John Dramani Mahama, has stated that the government has not taken any decision to enter the country into an International Monetary Fund (IMF) programme.
He said what the government was concentrating on was the preparation of a home-grown strategy of fiscal consolidation.
Mr Mahama said this in an address at the opening of the National Economic Forum in Akosombo in the Eastern Region Tuesday.
The forum, which is on the theme,“Changing the narrative: Building a National Consensus for Economic and Social Transformation”, is aimed at transitioning the country to a higher and sustainable path of development and improving the quality of life of the people.
The opposition New Patriotic Party (NPP) has boycotted the forum, claiming that the government had already adopted a set of reforms between 2014 and 2017, including the retrenchment of workers, and had communicated the policy document, titled ‘Economic and Financial Policies for the Medium Term’, to the IMF.
But President Mahama denied the claim.
“What we are concentrating on is the preparation of a home-grown strategy of fiscal consolidation. It is our expectation that both our domestic and international partners will join us in the implementation of this strategy,” he said.
“It is a tragedy of our very polluted and extremely partisan political environment that such a simple misunderstanding of the relevance of this innocuous document should become the basis for a major political player to stay away from this all-important national exercise,” he stated, in apparent reference to the NPP’s boycott of the forum.
Restoring macro-economic stability
Mr Mahama said in April this year, the government presented an aggregated document on measures it was taking to restore macroeconomic stability to Parliament and later the IMF, saying that document was expected to be finalised through broad consultations at the National Economic Forum.
He said it was time Ghanaians came to a common ground to agree on what should be the appropriate way to find sustainable solutions to the country’s developmental challenges.
Cynicism
Mr Mahama spoke against cynicism, saying the nation must rise above it.
Stressing the need for Ghanaians to let their voices be heard on issues of national importance, he said, “We cannot remain silent on issues that affect the nation. We need to talk to one another, rather than at one another.”
The President admitted that there was no way all the people would have common views on various issues, saying what they would always have in common was the “intention”, adding, “We all want to see Ghana succeed and to that end we all want to find a solution that is practical, a solution that is sustainable.”
The cedi hashtag (#bringbackthecedi)
Mr Mahama said as a listening President, he was not oblivious of the concerns expressed by businesses and the public on the effects of the measures by the Bank of Ghana to stabilise the cedi, which plummeted by about 20 per cent by the end of the first quarter of 2014.
“As a government, we believe that the actions taken were in the best medium-to-long-term interests of the country.
“It is our hope that the review addresses the unintended implementational flaws and allays whatever fears or anxieties the public in general and the investor community in particular have expressed out of the measures in order to foster the broad macroeconomic stability that we all so very much desire,” the President added.
Private sector
Touching on the role the private sector played in growing the economy, Mr Mahama said he was personally working to ensure that the sector received all the necessary support to grow businesses.
The government, he said, had activated support to the pharmaceutical, poultry, rice and aqua-culture sub-sectors of the private sector.
He further indicated that preparations were far advanced for the launch of a major campaign to promote the patronage of made-in-Ghana products.
Diversification
He also spoke about the need to diversify the economy from being the producer of primary products to an industrial economy, against the backdrop of uncertainties in the world price of primary produce such as cocoa.
He, however, assured farmers that diversifying the economy would not mean leaving them behind.
Wage bill
Mr Mahama said one of the measures adopted to resolve the economic challenges of the country was the control of the rising wage bill.
“Already, positive results are beginning to show in the form of a slow down in the growth of the wage bill and other indicators.
“The wage bill (excluding arrears), as a share of total tax revenue, declined steadily from 65 per cent at the end of 2012 to 57 per cent at the end of 2013,” he said, but noted that that was far behind the West African Monetary Union convergence criteria target of 35 per cent.
Economic challenges defy gov'ts
The President expressed the hope that the forum would tackle some of the challenges that had defied successive governments over the past decade.
“Every government, for example, has succeeded, to various degrees, in attaining macroeconomic stability, but as of now none has been successful in finding a way to sustain it.
“Indeed, almost every government leaves office with a less-than-desirable macroeconomic situation and the governments that succeed them then spend the next one to two years bringing the economy back from the brink,” he added.
To him, that was a vicious circle that must be broken.