Dr Lord Mensah, a Finance and Investment Expert, has observed that it would be difficult for government to maintain low macro-economic indicators while promoting economic growth at the moment.
He said government’s policy strategy was to bring down the macro-economic indicators before going to the financial market to borrow money to execute the projects it promised Ghanaians during the 2016 General Election.
“So maintaining a stable macro economy is quite difficult but government must find an optimum balance between ensuring economic growth and maintaining the macro-economic indicators at very low levels,” he explained.
The Financial and Investment Expert was answering a question on the call on the government not to sacrifice economic growth to maintain the macroeconomic indicators, which was captured in a communique issued by participants at the end of this year’s Ghana Economic Forum in Accra.
Dr Mensah, who is a Senior Lecturer at the Business School, Finance Department of the University of Ghana, in an interview with the Ghana News Agency, on Wednesday, said economic growth was a situation where ordinary people had access to potable water, could afford three quality meals a day, have access to quality education, fresh graduates getting decent employment while people had access to affordable housing.
Therefore, he said, for government to provide all these services to the populace, it had to borrow from the financial market and that would cause some macro-economic indicators to shore up.
The two-day forum was held on the theme: “Building a Ghanaian Owned Economy, 60 Years after Independence.”
The participants, which included economic and business gurus, policy-makers and think tanks discussed strategic issues like entrepreneurship and innovation, agriculture, insurance and how Ghanaian business could take advantage of the stable macro-economic environment to make gains.
Commenting on the call for government to nurture some indigenous businesses into global giants, Dr Mensah said government’s policy was anchored on creating an enabling macro-economic environment for businesses.
However, he said government could provide a labour force for local businesses that want to operate outside the corridors of Ghana.
He cited the Chinese government that supported her local industries with prisoners to provide affordable labour to execute contracts abroad and repatriate the benefits back to China.
He said Ghanaian companies that want to go global should first and foremost saturate the local market with high market share and with affordable prices.
This, according to him, would motivate government to offer them some incentives.
The Financial and Investment Expert also suggested that government could institute a special fund for indigenous companies that want to go global to tap into it.
Responding to the call for government to protect local banks from being swallowed by big foreign banks, he noted that government could help in that direction by way of regulation.
He said since the banking industry was about competition, risk management and innovative products, local banks must brace themselves up with the requisite capital requirement so that they could raise the necessary funding for mega contracts.
“The foreign banks have financial muscle and so they often come into the local banking industry with innovative products that enhances competition.
“Therefore there should be a blend between the local banks and the foreign ones because government cannot stop them from coming,” he observed.
With regard to the call for Ghanaian businesses to own the Ghanaian economy, he said, most of the businesses in the country were owned by the indigines, adding: “The Ghanaian businesses already owned the economy.”
Nonetheless, he said, there was the need for Ghanaian businesses to build their financial capacity to invest in the oil and gas industry since that sector required huge capital base to venture into it.
“You know our oil resources are offshore and that requires big capital to invest in that area for instance, prospecting, development of the oil wells and production demands huge capital, therefore Ghanaian businesses should look at how best they could raise financial resources to invest in that sector in order to retain the benefits here,” he said.
Touching on the need for Ghanaian businesses to collaborate with themselves to raise the requisite funds for investment and expansion, Dr Mensah observed that per the Ghanaian cultural heritage, Ghanaian businesses did not like collaboration.
According to him, most local businesses were established through blood lineage or family resources therefore they did not like someone to come in with capital and share the benefits.
In addition, he said some local businesses were “selfish” and did not understand the chain of production and, therefore, they want to operate with their little capital, hence they failed to expand to employ more people.
“If you look at other business jurisdiction there is someone providing labels for a company producing bottled water while another person is also producing plastics for production,” he explained.
“So that helps those companies to grow and support their economies.”
Touching on leveraging on technology for business transactions, Dr Mensah said with the mobile phone usage penetration hitting high level with about 36 million Ghanaians using mobile phones, businesses must take advantage to explore the social media to market their products.
He, therefore, entreated other African countries to emulate Ghana’s mobile telephony success.
The two-day forum was organised by the Business and Financial Times Newspaper with partnership from other major media organisations including the Ghana News Agency.