Tell us the size of stimulus package – AGI to gov’t
Government must be specific about how much money is in its “stimulus package” for the industrial sector, the Association of Ghana Industries has said, even as it pledged to support in the “design and implementation” of the package “to avoid waste.”
The 2017 budget states that “a National Industrial Revitalisation Programme with a stimulus package for industry will be established,” but falls short of mentioning how much money will be allocated.
The package, according to the budget, will “provide technical and financial support to existing companies that are currently distressed or are facing operational challenges, but are deemed to be viable to benefit from the stimulus package which will put them in operation in the shortest possible time.”
A Vice President for the AGI, Dr Yaw Adu Gyamfi, who called for clarity on the stimulus package, also said at the association’s review of the 2017 budget that: “we can develop all businesses; at the same time, if we do not put measures in place to, somehow, block the inflow of inferior goods,…we will not get anywhere.”
Government, itself, acknowledges that “growth in the industrial and manufacturing sector has significantly declined over time, contributing to an unprecedented level of unemployment.
Figures from the Ghana Statistical Service (GSS) shows the sector recorded -1.1 and -5 percent growth in the first two quarters of last year, even though the situation improved to 3.9 percent in the third quarter.
The situation, the 2017 budget states, “could be attributed to a variety of factors including, but not limited to the high cost of capital; limited access to medium to long term financing; high cost of electricity and unreliable power supply; limited access to land for industrial activity as well as weak logistic and infrastructure support for industrial development.”
Presenting AGI’s perspective of the budget, its President, James Asare-Adjei, lauded the tax cuts and initiatives like the One District, One Factory and the Industrial Development Fund, and pledged the association’s support towards their realisation.
The association, he said, had been working with the previous government, and hopes to work with the new government towards realisation of its flagship Industrial Development Bank project.
The AGI lauded govenrment’s decision to review all tax exemptions, adding that under-invoicing for certain imports constitutes a major source of revenue leakage and must be checked.
“In order to salvage this, we strongly recommend the introduction of minimum declared values for most imports in order to reduce ambiguity and discretion in dutiable values,” James Asare-Adjei said.
Government, the AGI said, must review power generation contracts with the view to reducing electricity tariffs to competitive levels within the West Africa Sub-region.
“The AGI also proposes that the least expensive power generation sources be dedicated to strategic industries which have linkages throughout the economy, and the aluminum value chain.”
Government, the association said, must expedite action on the establishment of the Construction Industry Development Authority, which “will mark the beginning of dealing holistically with the regulation, growth and development of the construction sector in Ghana.”
In the interim, the association said it wants the new government to continue projects begun by the erstwhile DNC regime, esure “prompt” payment for existing contracts, and ensure interest is paid on all delayed payments to contractors to guarantee their sustenance.
In this regard, it called for legislation of the payment of interest on all delayed payments “to ensure that all projects commence on the basis of fund availability.”