Finance Minister, Ken Ofori Atta, has said that government has put plans in place to address one of the major problems of the country, unemployment, with interventions that seek to create one million jobs in the next four years.
The initiatives, according to the finance minister, would be to promote growth in Small and Medium Enterprises (SMEs), support new ventures and stimulate innovation and start-ups.
He noted that, the private sector is being positioned to anchor a comprehensive and holistic response to the employment and jobs issue, the very reason government’s recovery programme and transformation agenda encapsulated in the GhanaCares package is geared at easing the constraints of the sector to enable them to expand and provide jobs for the youth.
“We are also feverishly working on a scheme that enables the private sector to train new recruits/entrants at a subsidized rate by Government. The clean-up of the financial sector and the invigoration of the entrepreneurial eco-system is expected to help remove the binding constraints of financing and market linkage for our daring youth. Our focus will remain on establishing a strong value system for entrepreneurship to flourish,” he said.
He further stated that government was also very aware of the obstacles that stand in the way of the private sectors’ growth and ability to absorb jobs. Key among the challenges is the persistent skills gap among the youth, as a recent survey indicated that about 50 percent of local employers’ report misalignment of or inadequacy of skills in the market.
To address this, he said, government would be strengthening the links between education and job market stakeholders.
The minister said, the Enterprise and Youth Support Fund (EYSF), which aligns with government’s overall strategy of developing a competitive and viable private sector economy will set up a “Youth banc” with the aim of financing youth-led start-up businesses across the country.
As part of this initiative, the government would be setting up an online investment hub for youth across the country to access information for the purpose of establishing businesses. Under this initiative, it is estimated that over 100,000 jobs will be created.
The EYSF will be managed by the Venture Capital Trust Fund (VCTF), which would be revamped and better positioned to carry out the designated activities as a Fund Manager.
“We are also pursuing the “Obaatanpa” Youth Entrepreneurship Drive, Ghana Skills and Enterprise Development Project, Student Entrepreneurship Initiative, the Youth in Community Improvement Module, and the Alternative Employment and Livelihood programmes as direct interventions in targeted sectors to help our youth live decent lives and contribute to nation-building” the minister said.
He told parliament that: “these interventions are clearly designed to bring us closer to confronting the jobs and employment challenges of our Youth. To ensure dedicated resources, the Ministry of Finance and all 26 participating institutions will, next month, sign an implementation Compact on youth employment which will tie release of resources to the delivery of results.
This Compact will also track youth-focused initiatives across the value chain of interventions under the GhanaCARES programme.”
State of the macroeconomy mid-year
The minister noted that government is fully committed to achieving the fiscal deficit target of 9.5 percent of GDP for the year in order not to derail from the objective of returning to the Fiscal Responsibility Act (FRA) fiscal deficit and primary balance thresholds of 5 percent of GDP and positive primary balance, respectively, by 2024.
As a result, there was no supplementary budget presented to parliament. The minister said the government is keen on staying within its budget reason it did not ask for any extra money.
The Minister said provisional fiscal data for Jan-June 2021 show that total revenue and grants amounted to GH¢28.3billion, equivalent to 6.5 percent of GDP, against a programmed target of GH¢32.4billion or 7.5 percent of GDP.
For the same period, total expenditure, including the clearance of arrears, amounted to GH¢50.6 billion, equivalent to 11.7 13 percent of GDP, against a programmed target of GH¢55.1billion or 12.7 percent of GDP.
The fiscal deficit for the period was financed from both foreign and domestic sources. Net Foreign Financing of GH¢15.2 billion constituted 68.3 percent of the total financing and included inflows from Eurobond proceeds. On the other hand, total domestic financing amounted to GH¢7.1billion, representing 31.7 percent of total financing.
The total public debt stock, as a percentage of GDP, increased from 76.1 percent at the end of December 2020 to 77.1 percent of GDP at the end of June 2021. This stock includes the financial and energy sector bailouts.
Excluding the financial sector bailout, the nominal debt stock as a percentage of GDP is 72.9 percent. The increase in the debt stock was mainly because of the Eurobond issuance in April 2021, COVID19 pandemic effect, contingent liabilities, and front-loading of financing to meet cash flow requirements for the first half of the year, the minister said.