The meeting was to lay bare his administration’s strategy for the private sector for the next four years and the president-elect did not disappoint as he rallied support of the private sector for government’s activities.
SPEECH BY NANA ADDO DANKWA AKUFO-ADDO, PRESIDENT-ELECT OF THE REPUBLIC, AT THE POST-AGM PRIVATE SECTOR FORUM OF THE PRIVATE ENTERPRISE FEDERATION (PEF), AT THE GIMPA EXECUTIVE CONFERENCE CENTRE, ON WEDNESDAY, DECEMBER 21, 2016.
Distinguished ladies and gentlemen, members of the Diplomatic Corps, and my dear friends, I am very glad to be among you today and I am grateful for this opportunity to address the Annual General Meeting of the members of The Private Enterprise Federation, PEF. I am glad to see so many friends in the audience. This gives me comfort and confidence.
I had a slight moment of hesitation about accepting your invitation at this time because I thought the timing was a bit awkward. The elections are over, I am no longer a candidate, we have won an emphatic victory but our mandate does not come into effect until January 7.
I decided I should come to your gathering because as the apex Business Council in Ghana representing over 80% of all Ghanaian businesses both in the formal and informal sector, you constitute a critical part of the solution to the main task of the Akufo-Addo government. I need to have you on board right from the start and there can’t be a better time to have this conversation. If, as we believe, the private sector is to lead in the development of the national economy, PEF and its members are key constituents in any discussion on Ghana’s future.
Since the Ghanaian people spoke with a clear voice and gave an overwhelming mandate to the NPP, I have been cheered by the general sense of optimism that has come over the entire population. I have been particularly happy about the sense of optimism and hope among the business community.
I have, along with the rest of the country, heard about the reported reduction in prices of goods in the markets. I suspect the approach of Christmas has something to do with these price reductions, but I am happy to go along with the suggestion that they are meant to demonstrate confidence in the incoming government. I am in full support of any measure that cheers up the long suffering people of Ghana. I need a happy and confident people to tackle the huge problems that we face. I need a confident, imaginative and hardworking business community to create the prosperous Ghana we dream of.
The NPP’s vision for Ghana is to build a fair and prosperous society in a democratic, united nation. To achieve this, we need a well-educated and skilled population, an efficient public service with strong institutions and a competitive economy that is capable of producing sustainable growth, jobs and shared benefits for all. We have laid out our plans in our Manifesto which we call Change: An Agenda for Jobs, which I am sure you have all read from cover to cover already. Bear with me though as I pick out some parts just for emphasis.
We aim to build the most business-friendly and people-friendly economy in Africa, which will create jobs and prosperity for all Ghanaians; and this we intend to do through private sector empowerment.
– I repeat through private sector empowerment.
Government’s role is to create the atmosphere for the private sector to flourish. We aim to achieve double digit GDP growth annually for the next four years, and this is possible if you remember that under the Kufuor-led NPP government the economy attained a GDP growth rate of 9.1% in 2008 without oil. We will reduce the cost of doing business, maintain fiscal discipline, reduce government borrowing and reduce interest rates to spur private sector investment.
Our economic programme will enhance agricultural production and productivity, along with a transformation of the economy through value- addition to our raw materials in a process of rapid industrialization.
The NPP will invest in our people through the provision of quality education and healthcare, as well as affordable housing. The role of government would be one of providing an enabling environment for the private sector to thrive, as well as putting in place social policies to protect the disadvantaged and vulnerable in society. In particular, the NPP will implement policies to invest in rural, coastal, Zongo and inner city communities.
To attain a competitive economy that is capable of producing sustainable growth, jobs and shared benefits for all – two key stakeholders must play their roles_
- The Government, by setting the environment and climate to allow private sector to flourish, and
- The Private Sector to have the confidence to exploit all the opportunities offered by such a business friendly administration.
Once in government, our priority is to do all we can to give YOU the confidence of a positive business environment devoid of arbitrary and irrational policy initiatives and one that gives YOU the confidence to do what you do best – INVEST IN THE NUMEROUS OPPORTUNITIES TO CREATE JOBS AND PROPSPERITY
To achieve our objectives, our principal economic policy direction will be to:
restore macroeconomic stability, shift the focus of economic management from taxation to production, manage the economy competently, and make the machinery of government work to deliver the benefits of progress to Ghanaians.
Restoring Macroeconomic Stability
The NPP will restore and maintain macroeconomic stability through the pursuit of sound policies on the basis of an enhanced institutional framework. Macroeconomic stability is built around three pillars: monetary discipline, fiscal discipline and financial stability. To reinforce monetary discipline, the Bank of Ghana Act, 2002 (Act 612) established the Monetary Policy Committee (MPC) to guide the implementation of monetary policy. The other two pillars (fiscal discipline and financial stability) have no such institutional anchors.
Enhancing Fiscal Discipline
Fiscal indiscipline has been the bane of economic management in the country. To address this, the IMF recently insisted on the passage of a Public Financial Management Act. However, the law, as enacted, is woefully inadequate, because it lacks the key elements that will protect the public purse from abuse. Fiscal policy implementation, as it stands now, lacks three basic elements; the absence of a transparent institutional arrangement for providing quality fiscal information to the public, the absence of a mechanism for ensuring accountability in implementing optimal fiscal policies to guarantee the stability of the system, and the absence of an institution to ensure the credibility of fiscal projections provided by the Government.
To address the problem of the current high public debt levels and the country’s high risk of debt distress, our government will adopt and implement rules to anchor fiscal policy implementation. For example, there will be specific targets for the reduction of government borrowing and debt.
We intend to enact a Fiscal Responsibility Law (FRL) to bring comprehensiveness, accountability, transparency and stability to the entire budgetary process. Under this law, a Fiscal Council would be established to set up medium-term fiscal policy and monitor compliance.
In addition, to restore overall macroeconomic stability, we will:
- undertake financial sector reform to deepen financial markets, promote financial inclusion, enhance the supervision and regulation of the financial institutions and move the country’s payment system towards an electronic payments system
- implement a strategy aimed at repositioning the country as an International Financial Services Centre (IFSC) within the region to create jobs
- formalize the economy through the establishment of a national database, using the National Identification System as the primary identifier, with linkages to the databases of institutions such as the Police, National Health Insurance Scheme (NHIS), Passport Office, Immigration, Courts, Ghana Revenue Authority (GRA), and the Driver and Vehicle Licensing Authority (DVLA), and
- Stabilize the currency exchange rate for the long term through prudent and disciplined macroeconomic management, an increase in domestic production, and an increase in exports.
Shifting the Focus of Economic Management from Taxation to Production
Ladies and gentlemen, I believe I preach to the converted when I state that our economy has been choked by the imposition of far too many taxes. This has increased the burden on the private sector and has become a disincentive for investment and production.
To address these challenges, the new administration will shift the focus of economic policy away from taxation to production by removing what Dr Bawumia famously terms the nuisance taxes.
The ensuing increase in production and economic growth, arising from a streamlining as well as the elimination and reduction of some of these taxes, will more than compensate for any temporary revenue shortfall.
In sum, we will make Ghana work again.
Ladies and gentlemen, easily the most critical problem facing our country and the number one priority for the incoming government is the lack of jobs especially for young people. We believe that job creation is essentially a private sector activity, and we will put in place the policy framework that will help businesses expand and create jobs, as well as promote the growth of entrepreneurship opportunities for young Ghanaians in particular.
We have a clearly thought out agenda for job creation in place and I invite you to join us for its rapid implementation.
I know that our industrial sector faces difficulties. There is a long, intimidating list of challenges that we have identified.Our strategy is to address these challenges in ways that enable industry to thrive and become a major source of jobs, especially for the youth.
Let me briefly address some of the key issues and how my administration will address them
Our businesses cannot be competitive when the cost of capital is so high. Interest rates are hovering around 34%pa, there is inadequate medium-to-long term financing and venture capital funding, and inadequate credit financing for SMEs.
Our government will re-focus the National Investment Bank (NIB) to provide finance for the industrial sector. We shall establish an Industrial Development Fund (IDF) to finance critical private sector industrial initiatives and realign the focus of Ghana Investment Promotion Centre (GIPC) to attract financing and investments into selected strategic industries.
Ladies and gentlemen, we accept that not everyone in business or in this room for that matter, would be or needs to be an NPP supporter. What we need are astute and dynamic business entrepreneurs of whatever political persuasion. The incoming administration will therefore strive to eliminate the current system of political patronage that distorts our economy. There is an urgent need to restructure existing state-sponsored microfinance schemes such as MASLOC to provide credit for SMEs, while strengthening oversight responsibilities over privately-financed micro finance institutions.
ENERGY FOR INDUSTRY
Probably the most acute challenge that industries and businesses have faced in the past five years has been power related. The power supply has been inadequate, unreliable and expensive for industries and businesses.
My dear friends, the power problems will be resolved to ensure that businesses can spend their energies on more productive and innovative issues.
RAW MATERIALS FOR INDUSTRY
Another major problem facing industry is the inadequate and poor quality raw materials for industrial processing. We shall provide specific incentives for the production and supply of quality, locally-produced non-agricultural raw materials for industry at competitive prices. We shall provide a comprehensive programme of support for the cultivation of selected agricultural products as raw materials for agro-processing, including tomato, cassava, cocoa, soya beans, maize, oil palm, cashew, cotton, sheanut, selected fruits, groundnuts and rice.
SKILLS DEVELOPMENT FOR INDUSTRY
Skills shortage is one of the critical areas that our government will address urgently.
The technical, vocational and skill training sectors will receive the attention they deserve. We shall in partnership with the private sector, transform the apprenticeship training model from a supply-driven approach to a market- demand model based on the German apprenticeship model, and we shall create an information portal and set up a task force to assist our youth and artisans in making their products and services visible on a local, national, and global scale.
We have identified some key initiatives integral to our Industrial Development Strategy, which we intend to implement vigorously. I refer in particular to the “One District One Factory Initiative” and I want to emphasize that this policy will be implemented in collaboration with the private sector.
I refer also to the Strategic Anchor Initiatives: Government will partner private local and foreign investors to develop large scale strategic anchor industries to serve as growth poles for the economy, especially in petrochemicals, pharmaceuticals, iron and steel, cement, aluminium, salt, vehicle assembly, manufacture of heavy machinery, equipment and machine parts, agro-processing, garments and textiles, assembly of electronics and light machinery.
Ladies and gentlemen, we have also planned an Industrial Sub-contracting Exchange. Through a concerted, collaborative and collective effort, the government will enforce local content provisions by developing efficient and competitive local supplier networks for the goods and services that industry needs and that can realistically be sourced locally. To facilitate this, we shall develop a National Industrial Sub-contracting Exchange to link SMEs with large scale enterprises.
EMPOWERING LOCAL BUSINESSES
We believe in empowering the local private sector and will pass legislation to require that at least 70% of all Government of Ghana, taxpayer-financed contracts and procurements be executed by local corporate entities.
In addition, we will introduce a policy requiring that 30% of the required 70% be sourced from entities owned by women, persons with disability, and those established under the Youth Enterprise Fund (YEF).
HARMONY IN INDUSTRIAL RELATIONS
My administration will work with stakeholders, including employers and trade unions, in an open and fair manner on employee welfare, as well as ensuring living wages for all workers. We intend to develop, in collaboration with employers, trade unions, educational institutions and other state bodies, such as SSNIT, a database of the labour market with the view to establishing a National Recruitment Agency to serve as the primary source for channelling job openings to Ghanaians. We will also work with employers and trade unions to formulate a policy of comprehensive occupational health and safety standards
In sum, ours is a holistic approach to job creation, and our goal is that by the end of the next decade, industrial and manufacturing activities will be the mainstay of our economy.
Ladies and gentlemen, Agriculture continues to be the anchor of the country’s economy, employing more than half of our workforce. Growth in this sector has declined dramatically and needs to be reinvigorated urgently. Food is unnecessarily expensive in a country that is blessed with fertile land. Our production methods are not modern and income levels of farmers and fisher folk remain low, thus making the sector unattractive for the youth as a sustainable means of livelihood.
Our vision for the next four years is to modernize agriculture, improve production efficiency, achieve food security, and profitability for our farmers, all aimed at significantly increasing agricultural productivity. Our government will pursue a value-addition strategy, aimed at rapidly ramping up agro-processing and developing new and stable markets for our products.
Our policies and interventions will ensure that our farmers and fisher folk earn higher incomes. Our reforms will encompass the full agricultural value chain and create additional businesses and job opportunities in the areas of storage, transport, processing, packaging and marketing of agricultural produce.
District Assemblies and Traditional Authorities will be assigned specific roles in agricultural development and we will adopt policies specifically targeted at supporting women in agriculture.
The historic mission of the Danquah-Dombo-Busia political tradition is two-fold. The first is to establish within the body politic of Ghana a democratic system of governance where the rule of law, respect for human rights and the principles of democratic accountability are entrenched. The recent conduct of the Ghanaian people on 7th December, 2016, when, in all serenity and dignity, they exercised their sovereign power to the admiration of the whole world, shows that we have, indeed, taken decisive steps towards realising that objective. Knowing that the price of freedom is eternal vigilance, we cannot slacken. We have to continue with that journey. The second is to establish the primacy of the private sector in the development of our nation’s economy. That is the task confronting us now, and I am summoning you to partner with my government to achieve the task.
As you can see, there are many specific issues that your Chief Executive outlined, which have not received a specific response. That will come later. The presentation here has been a more broad outline of where we stand in terms of thinking and overall posture. The specific responses will follow a more detailed examination of what was in the paper. For now, there are four issues to conclude which are not part of the brief, formal text.
- I confirm the relevance of the statement made by the Chief Executive of PEF about the need for public expenditure to support the growth of the private sector. I endorse fully that statement.
- I came here with Alan Kyerematen, because he is the person who is going to be the Minister for Trade and Industry in the Akufo-Addo government. I say going to be, because with all respects to the Parliament, the NPP majority in that body should guarantee that his name passes!! I thought you should know this, and know that you are going to be dealing with a very competent and knowledgeable political figure of the first rank, whom I am confident is going to oversee the rapid industrialisation of our country.
- Neither he nor any of the people who are going to be working with me are going to be your competitors. Ours is the public sector, and you are the private sector. The former is meant to be a supporter, not a competitor, of the private sector. And that is how it is going to be. I am going to repeat here something I have said several times. Those who seek to be in my government to make money are going to be disappointed. They will make money in the private sector, not in the public sector.
- Finally, the call for dialogue between your organisation and other private sector bodies with government is going to be given concrete institutional expression.
Ladies and Gentlemen, if you didn’t know it already, I am sure I have now convinced you that we have an ambitious but I believe deliverable programmes for my Administration. These programs will not be deliverable if you the Private Sector are not confident or able to play your crucial part.
And so I tell you, my friends gathered here in this room and the Private sector at large,
- You asked for a Government that spoke your language and believed in the Private Sector
- you asked for Policies that supported rather than hindered your plans
- you asked for a Government that listened and worked with you rather than dictated to you
- you asked for a Government with a team of professionals able to deliver on our promises and
- You asked for Transparency and Accountability in Government.
You are getting it. Let’s roll up our sleeves and get to work. And that will mean from the 8th of January. We intend to keep our side of the compact and we expect the same from you. There are exciting times ahead of us. Join us to build that happy and prosperous nation we all want for our nation.
I thank you and may God bless us all and our country Ghana.