GEA call on government to develop spending policy

Accra, Sept. 7, GNA - The Ghana Employers Association (GEA) on Wednesday called on government to develop a spending policy with emphasis on investment of the oil revenue in infrastructure development especially roads, water, education, energy and health.

Addressing the 51st Annual General Meeting of the Association in Accra, Mr Terence Darko, President of the Association, said the injection of the revenue in these sectors would help reduce poverty and accelerate growth.

It will also lead to rural development; speed up national industrialisation process and employment creation that would ultimately engender a qualitative improvement in the lives of the citizenry. The meeting was on the theme:Good Management of Ghana's Oil Revenue for National Development".

Mr Darko said government should come out with direct policy intervention towards ensuring that Ghanaians assumed leadership role in the oil industry. He said building domestic capacity would be required in negotiating

with oil companies, management of the oil industry, provision of labour and skills to the oil industry and domestic support industries and most importantly build a non-oil economy.

"A strong and attractive business environment is an important pre-condition to the successful development of local content," he said, adding that the focus should be on reducing the barriers to entry, improving local skills and reducing transaction cost.

The GEA also suggested a timely information flow from government, oil companies and other stakeholders to shape public expectations.

Mr Darko said while not all information could be placed in the public domain, some basic information sharing was necessary to avoid false expectations and accusations, to manage people's expectations downwards.

"If information is not shared broadly and only kept amongst a certain group, this can cause suspicions to develop and ultimately lead to distrust amongst different stakeholders," he said, and added that better and broader dissemination of information would improve transparency and accountability.

On the economy, Mr Darko said despite the consistent drop in inflation rate and the Bank of Ghana Policy Rate, commercial banks continued to keep their lending rates high, posing challenge to the business community.

He said failure of the lending rate to match pace with policy rate and the widespread between lending rate and deposit rate call for a critical look at the operations of commercial banks in the country.

"While the banks have a responsibility to reduce lending rates, any significant actions to do this on their own volition, is unlikely anytime soon. The long-tried method of moral suasion does not seem to be a viable option," Mr Darko said.

He called for immediate intervention by the monetary and fiscal authorities to achieve quick and tangible results.

Dr Kwabena Duffuor, Finance and Economic Planning Minister, said government was doing everything possible to ensure prudent and transparent management of the oil and gas revenue.

"We are therefore drawing heavily on the experiences of both successful and unsuccessful countries to adopt and adapt good practices and shy away from mistakes to avert such resource curse," he said.

Dr Duffuor said the Petroleum Revenue Management Act provided the framework for the collection, allocation and management of petroleum revenue in a responsible, transparent, accountable and sustainable manner for the benefit of the citizenry.

He said to avoid reliance on oil and gas for national development, government was placing emphasis on agriculture.

Awards were presented to some past executives for their contributions and commitment to activities of the Association.