General News of Thu, 31 Mar 201616
‘Gov't killing private businesses’ - Dr. Bawumia
The government is “squeezing the life out of businesses” leading to a high rate of unemployment in the country, the opposition New Patriotic Party’s three-time running mate to flagbearer Nana Akufo-Addo has said.
Dr Bawumia made the assertion when he delivered a lecture at the Kwame Nkrumah University of Science and Technology where he outlined solutions to Ghana’s economic and unemployment challenges.
The programme, organised by the Economics Students Association of the university, was held on Tuesday 29 March 2016 on the topic: ‘High Graduate Unemployment and the Employment Embargo, What is the Solution’.
In his delivery, Dr. Bawumia said it was important to ensure a stable macro-economic situation in the country to promote business growth with a resultant effect of an upsurge of employment opportunities.
According to him, the governing National Democratic Congress (NDC) has failed to maintain desirable levels that will promote economic activities.
“High fiscal deficits, high current account deficits, high inflation, high interest rates, exchange rate depreciation, do not provide supportive environments for job creation. They, in fact, result in job losses”, he said.
He continued: “With such large scale borrowing, government is crowding out the private sector, which is unable to borrow to grow their businesses. Risk-free Treasury bill rates are around 25% (up from 10.6% in 2011) and bank lending rates are on the rise because of excessive government borrowing. Lending rates are now above 30 percent”.
He explained that the situation has made it virtually impossible for businesses to borrow in the financial sector to grow and produce more.
“Government has today become the biggest competitor to private businesses, and, by its actions, squeezing the little life left in them,” he stressed.
The former Deputy Governor of the Bank of Ghana lamented the preference of countries like La Cote d’Ivoire to Ghana, by businesses, due to favourable economic conditions there.