Business News of 2014-08-08

AGI hails gov’t/IMF talks; Calls for involvement of industry

The Association of Ghana Industries (AGI) has welcomed the government’s decision to seek the assistance of the International Monetary Fund (IMF), saying it is hopeful the discussions would help restore fiscal discipline and result in an improvement in the business climate.

It, however, urged the government to manage the process properly to ensure that the country obtained value for money in all economic transactions.

“In view of the apparent inability of the government to ensure fiscal discipline, AGI is of the opinion that the decision to engage the IMF is the only option left,” the association said in a communiqué issued last Tuesday.

The communiqué, which was signed by its President, Mr James Asare-Adjei, also requested the government to actively involve industry in the IMF-engagement process, adding that the association, which comprises some 4,000 manufacturing companies and related service providers, was ready to lend a hand to help recover the economy from its current challenges.

“AGI is requesting active involvement of industry in the IMF-engagement process to ensure that the country obtains value for money in all economic transactions,” the communiqué said.

The statement was issued days after President John Mahama directed his economic management team to open discussions with the IMF on how the fund could help the country address the various challenges that had plagued the economy in recent times.

Such challenges include a gaping deficit of 10.1 per cent for 2013, a depreciating cedi, which has fuelled monthly increments in prices of goods and services– measured by inflation– and depleting international reserves.

“The decision to involve the fund in the recovery process is to complement home-grown economic policies; as well as regain confidence from the international financial markets on the economy,” President Mahama said earlier.

Don’t tax more

While noting the challenges that some of the government’s policies have had on industry, the AGI said the tendency to increase taxes in a bid to raise more revenues was inimical to the growth of businesses.

It, thus, cautioned against a further increase in taxes in the private sector, explaining that it “risks killing the hen that lays the golden egg.”

On the Bank of Ghana measures on the use of foreign exchange in the country, the association said the measures had failed to achieve their intended goals, hence the need for them to be completely scraped.

“This is the time to reassure the whole country that the foreign exchange paid into our banks are welcome and will be secured,” the association added.

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