AGI calls for early release of US$1bn industrial support

The Association of Ghana Industries (AGI) has asked government to ensure an early release of the US$1 billion it pledged in the 2019 budget towards industrial development.

An early release of the funds, it said, will accelerate the country’ industrial development, improve confidence in the economy, ensure that the desired impact is generated, as well as lend credence to government’s industrial transformation agenda.

“We want to see the funds released in time for the necessary interventions to take off. This should be done in the early parts of the year so that by the end of the year, we will see the impact. If we say 2019 and we wait for October or November before the funds are released, then we will not see the impact that we expect,” AGI’s CEO, Seth Twum Akwaboah, told the B&FT.

Issues relating to when the fund will be made available, how it is going to be administered, who is going to get what, he said, are of utmost importance to industry and need to be clarified. This, he said, will help businesses to plan accordingly.

Whilst commending government for having a lot of “beautiful plans”, he was quick to note that there exists a thin line between plans and implementation, adding: “What we want to see this year is more action.”

“The One-District One-Factory (1D1F), as a part of the industrial plan, is key and the effort that should go into it must be very strong this year. We have already seen a few factories but we all know that we have not met the target, so we want more activity,”

Background

The Minister of Finance, Ken Ofori-Atta, during his presentation of the 2019 budget in Parliament last year, said, government will mobilise an estimated US$1 billion from various funding sources for small, medium and large scale enterprises to accelerate the industrial transformation agenda, including the 1D1F programme in 2019.

The intervention is under the government’s Ten-Point Industrial Transformation Programme, which seeks to facilitate investments into new strategic anchor industries as new growth poles for the Ghanaian economy.

Some of the strategic industries include automotive and vehicle assembly, pharmaceuticals, garments and textiles, vegetable oils and fats, industrial starch, industrial chemicals, and iron and steel.

This year, one of the anchor industries – textiles – has been offered a 3-year tax holiday while Kantanka Motors, a local carmaker, has been given a 10-year tax exemption, including import of material for manufacturing and assembly purposes.

Expectation for 2019

Although Mr. Twum admitted that this year would be a dicey one because of the exit of the International Monetary Fund (IMF), he noted that as an association, the AGI had high hopes.

“We have strong hopes that the year will go well. In terms of specific details, we are looking at the macro economic environment; it is the most critical part of business and we expect a more stable macro space in 2019 than in 2018,” the CEO said.

He said if the macro environment is not stable or predictable, it will adversely affect planning and that the gains made under the IMF programme will not be consolidated.

He also said more needed to done to ensure that factors such interest rate, inflation, policy rate, among others, that affect businesses, all stay within a reasonable range through 2019.