Dr Kwabena Duffuor, Minister of Finance
The 2011 Budget Statement aims at stimulating growth for development and job creation. Ecobank Development Corporation (EDC), a pan-African investment bank examines the critical areas of the budget such as agriculture, energy, education and transportation.
According to the EDC, the mechanisation of the agriculture sector has the potential of ensuring food security in the country and will subsequently lead to a growth in agriculture exports.
Historically, the issue of agriculture has been part of every budget but its targets are never attained because the objectives have always been ambiguous. Above all, there has been the lack of political will to implement bold decisions that would transform the sector.
Under the 2011 budget, the govenment hopes to establish at least one agricultural mechanisation service centre per district in 86 districts, establish fish processing, packaging and marketing facilities, establish the Export Development and Agriculture Fund to finance agriculture.
The budget also proposes the acquisition of a modern rice mill by the National Food Buffer Stock Company; improving research in fisheries (establishing fish laboratories and quarantine stations) as well as intensifying the treatment and control of the Cocoa Swollen Shoot Virus Disease.
Energy is a key component of industrialisation and therefore the government should not lose focus on the development and provision of alternative sources of energy as well.
EDC analysts also expressed the bank’s hope that in time, renewable energy resources would provide a greater bulk of the nation’s energy requirements.
In the interim, a lot of attention should be given to upgrade the existing networks from the hydroelectric dam in order to minimise power interruptions which are very detrimental to the health of businesses.
They also think that the government’s decision to expand the electronic tolling system to cover other major roads would help to increase revenues significantly for the sector.
The rail and road networks are the poorest forms of infrastructure in the country and efforts must, therefore, be made to rehabilitate the western railway line and the sub-urban railway lines in Accra-Nsawam, Kumasi-Ejisu and Sekondi-Takoradi if goods and services are to move freely and cost less.
There is also the need for government to continue the policy of liberalising the regulatory framework to attract more airlines and to create the enabling environment for the private sector to operate and invest in aviation infrastructure and services.
Tourism is also one sector that is yet to make any meaningful impact on the economy. This calls for a bold policy initiative to aggressively promote and make the country the preferred tourist destination.
Over the past year, the government participated in eight international conferences and seminars to adapt best international practices in the industry.
The government has been supporting in the organisation of tourism programmes like the Paragliding Festival, implementation of National Tourism Act and Establishment of Accra Visitors’ Information Centre.
But a lot more than what is presenting happening should be done to expand the frontiers of the tourism industry. The government can insert an hour or two tourism time-outs to sites in Accra, the Central or Eastern Regions into international conferences hosted directly by the government or agencies.
The EDC believes that if the sector is well resourced it can be a lead foreign exchange earner for the country, with receipts clearly surpassing what the country gets from gold and cocoa.
Another area of concern to the financial analysts is the country’s struggling capital market. Over the past 20 years, the market has not significantly grown in depth. It has only 35 listed companies with a market capitalisation of GH¢19.907 billion.
Over the five years the market has not witnessed any major listing of govenment enterprise divested through the market. A move in this direction should help the liquidity position on the market.
In this regard, the proposed establishment of a small- and medium scale Enterprise Development Market by the Ghana Stock Exchange will increase stock market activity and the initiative must be carried on with all the seriousness that deserves if the market is to grow.
The effect of this and the new pension scheme will be further creation of employment opportunities.
- EDC/GB