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General News Tue, 20 May 2003

Cabinet Approves Long-Term Savings Scheme

Cabinet has given approval for the implementation of a Long-term Savings Scheme that would be tied to retirement of the holders.

The structure of the savings scheme would soon be placed before the Finance Committee of Parliament for study and iron out some few rough edges before the law was promulgated.

Dr. Samuel Nii Ashong, Minister of State at the Ministry of Finance and Economic Planning announced this at a press conference on Monday to inform the public about the annual review of the National Economic Dialogue scheduled for next Tuesday.The Minister said, the new scheme would provide incentives for both workers in the informal and formal sectors to set aside some money in a long-term saving scheme that could only be withdrawn at the time of retirement.

It said the scheme had become necessary because of the inability of the banks to provide long-term finance for businesses to take off.

"This, we believe, will solve the problem of start-up companies, which may require long-term capital to become really established companies."

Dr Ashong said the banks in the country were not currently in a position to provide such long-term capital, leading to the demise of most companies with long gestation periods.

Dr Paa Kwesi Nduom, Minister of Energy said the savings scheme constituted the foundation building of the economy since it would provide the needed resources for economic growth of industries.

He said investment advisors would expertly manage the scheme.

Dr Nduom said education was an essential factor in getting workers in the informal sector to get involved in the scheme.

Touching on the National Economic Dialogue, Dr Ashong said the secretariat had played a key role in initiating the National Identification System, Action for Employment Generation, Mobilisation of Resources from Non-resident Ghanaians, Restructuring of the Domestic Debt and the Long Term Savings Tied to Retirement.

These, he said, had been achieved despite the lack of active participation of some stakeholders due to human and financial resources needed for the implementation process.

Source: gna