Manufacturing unlocks poverty - Panelists

Accra, March 14, GNA - Panellists at a forum on the role of the manufacturing industry in economic development were unanimous that accelerated growth and poverty reduction were only possible if the sector was adequately supported to play its role.

They argued that the middle income status being envisaged in 2015 would remain largely a mirage when the problems of energy, access to credit and unbridled trade liberalization that had been the bane of manufacturing industries were not dealt with.

The forum organized by the Ghanaian-German Economic Association (GGEA) on the theme: 93Economic Growth in Ghana 96 Growth without Manufacturers?," was to assess the role of the manufacturing sector in the country.

Mr Alfred Dorn, Managing Director of Ghana Agro-Food Company, said the only way to bring more people out of poverty was to invest more in the agro-processing sector because of its potential to improve the standard of living in rural and small urban communities. According to him, although the service sector was growing more strongly in terms of its contribution to the GDP, it would not necessarily contribute in terms of spreading the benefits of growth to the wider society, especially not to the development of the rural and semi-rural areas.

"Therefore manufacturing which focuses on adding value to local raw materials will be the way to ensure that these benefits are able to trickle down to the majority of Ghanaians and turn the country into a middle income country," Mr Dorn said.

Mr Dorn held that the ability of the manufacturing sector to absorb large quantities of locally produced raw material would provide the necessary impetus for improvements in the farming methods, to improve yields and increase productivity which will all contribute to increasing food security and improving rural incomes all of which were necessary to secure Ghana's economic and social development.

Mr Seni Adetu, Managing Director Guinness Ghana Breweries Limited said in order for a sustainable economic growth to take place there must be genuine partnership between the government and the private sector in dealing with issues of mutual consent.

Besides there is the need for a favourable tax regime, provision of adequate infrastructure, legal framework in place to protect the interest of the business community and an enabling environment that permits manufacturers to break away from the old ways of managing their businesses.

Mr Helmut Clever, Managing Director, Neoplan Ghana Limited, expressed concern about the erratic power supply situation and the high voltage fluctuations that had been causing damages to equipment and machinery.

He called for the protection of local industries, saying that the import of finished products was tantamount to the export of local working places.

Mr Cletus Kosiba, Executive Director, Association of Ghana Industries, repeated the call on government to abolish pre-production taxes and duties on raw materials by substituting them with taxes on profit and Value Added Tax since they add up to the high cost of production and make local products uncompetitive compared with imported ones.

There was also the need to take immediate steps to normalize energy supply to stem the crisis through which the companies are going through and to avoid redundancies.

Responding, Deputy Minister of Trade and Industry Gifty Ohene-Konadu said efforts were being made to promote investments to enable the manufacturing sector to achieve a growth rate of between 8 and 12 per cent in line with the country's vision to attain a middle income status.

There is also the urgent need to add value to our agricultural produce for the domestic and export markets. Mrs Jana Orlowski, Deputy Head of Mission Embassy of the Federal Republic of Germany said Ghana's manufacturing sector was lagging behind macroeconomic and sectoral development. For instance the sector grew by 7.3 per cent in 2006 whereas the GDP grew by 6.2 per cent. She said manufacturing industries form the backbone of any economy, under the aspect of job creation, regional trade, integration and competiveness.

Mrs Orlowski said manufacturing industries were also the basis of technical development and innovation. "The most vibrant service sector cannot replace a sound national manufacturing industry," she emphasized.

Mrs Orlowski said a sound manufacturing with working export opportunities into domestic, regional and international markets could change the country's unemployment situation. Mr Stephen Antwi, President of GGEA, said the current energy crisis was severely constraining the ability of companies to achieving their annual production targets, saying it had a serious implication for employment. He cited the current high cost of cement on the market and blamed it on the power situation. 14 March 07