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Vice President Kwesi Amissah-Arthur has stated that government’s priority is to focus on addressing the persistent economic difficulties created by the expansionary fiscal stance.
He said the basis for the country’s extended credit facility arrangement with the IMF last year was to develop a domestic policy to achieve macroeconomic stability, restore market confidence and revive the nation’s transformation agenda.
Vice President Amissah-Arthur was speaking at the opening of the “Ghana Economic Forum 2015” in Accra.
The forum, which is the fourth since its inception is on theme: “Ghanaian-owned economy: Setting the agenda for achieving it.”
This year’s event also kick-starts a five-year agenda to annually assess the progress made by government and the private sector towards the creation of a Ghanaian-owned economy.
Vice President Amissah-Arthur said government’s transformation plan is focused on sustaining macroeconomic stability, economic diversification and social inclusion.
He said the strategy envisages the reform of the state-owned enterprises, a gradual shift of public expenditure from current to capital spending and the channeling of new oil and gas revenues into productive investment to develop the national infrastructure including reliable power generation.
He explained that the government’s short-term economic objectives aimed at fiscal adjustment are to restore the debt sustainability, rebuild buffers, and eliminate the fiscal dominance of monetary policy.
He said the programme is expected to reduce the rate of inflation and enhance non-oil economic growth.
Vice President Amissah-Arthur also announced that the government intends to facilitate local participation in all sectors of the economy and as such would extend the local content policy to the power sub-sector to encourage more local participation.
He explained that the policy is to ensure that indigenous Ghanaian businesses take part in power generation, construction works and allied services to encourage transfer of skills and prevent capital flight.
“The local content policy is developing consistently in the petroleum sector and receiving support from the petroleum companies operating here. Hence the decision to extend it to the power sector,” he added.
Vice President Amissah-Arthur noted that though the provision of public infrastructure has long been considered as a responsibility of government, however given the nation’s budget deficits, the provision of these facilities could no longer be undertaken solely through budget allocations.
He said it has been estimated that addressing Ghana’s infrastructure deficit would require spending at least $ 1.5 billion per annum over the next decade.
He said the government has therefore made it a central part of policy to encourage the use of public-private partnership as a means of leveraging resources and expertise in order to close the infrastructure gap and deliver efficient public infrastructure and services which would serve to catalyse sustained growth.
Vice President Amissah-Arthur also announced plans to establish a fund to raise the requisite long-term financing to support long term lending to the private sector.
He said the idea is to enable the indigenous private sector move from rhetoric to action and to partner government in building a strong infrastructure base to facilitate the economic development and to collectively take ownership of the economy.
