Ghana government urged to create enabling environment for private sector to trigger economic growth

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An associate professor of economics at the University of Ghana, Legon, Professor William Baah-Boateng, Monday urged the Ghana government to create the enabling environment for the private sector to operate at optimal levels.

This, he said, would lead to massive employment creation and drastic reduction in poverty levels in the country.

Prof. Baah-Boateng, who is also head of the Department of Economics, was speaking at the 2018 Business Council for Africa (BCA) Economic Review Forum.

It was under the theme “Deepening Government’s Collaboration with the Private Sector: The Role of Policy”.

The government alone, he emphasized, could not create sustainable jobs for the teeming unemployed youth, hence the need to create the enabling environment for the private sector to thrive.

“Government cannot be the main source of employment any longer; as it were, we moved away from that in 1983 when we had our economic reform and decided that the private sector is supposed to be the engine of growth.”

Prof. Baah-Boateng urged the government to pay special attention to the private sector, saying when given the right environment, it would help in the transformation agenda of the country.

“Government is doing well when it comes to macroeconomic stability; the central bank is cleaning up the banking system to ensure that things are done very well. All these things are done you will expect that lending rates will trend in line with inflation and if that happens you expect that the private sector will be able to borrow at quite affordable rates and expand,” he remarked.

He further urged the government to invest the country’s oil revenue into massive infrastructure as that would bring about the needed employment creation.

“It is not bad to grow on the back of the oil as an economy; however, oil and extractive do not generate the direct kind of jobs that you expect so that is the point we are making,” he stated.

The executive director for policy think tank, Institute for Fiscal Studies (IFS), Professor Newman Kwadwo Kusi, said the West African country had been facing fiscal challenges since 2012 as the country spent 40 percent of its tax revenue to finance Ghana’s debts.

“Ghana’s financial outlook faces both domestic and external risks. The country presently spends 40 percent of its tax revenue on interest payments and that is a constraint on the budget for development.

The economist, who has done extensive consultation work for several international organizations, urged the government to double its revenue mobilization efforts to have enough liquidity to undertake massive infrastructure in the country.

“The only way the country can come out of its present economic predicament is for the government to put in place a comprehensive revenue enhancement strategy to help realize the ‘Ghana Beyond Aid’ mantra trumpeted by the country’s president, Nana Addo Dankwa Akufo-Addo, upon his assumption,” he emphasized.

It is estimated that between 12 and 13 percent of the country’s estimated 30 million population pay taxes to the government and this, the economist noted, was a major source of worry as the government did not have the financial capacity to meet the growing demands of the public.

He therefore urged the Ghana government to mount a good sensitization program across the country on the need for citizens, especially those in the informal sector and others, to pay their taxes. Enditem

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