Could you please tell us what has been your professional background?
I graduated as a mechanical engineer and worked with VALCO as a Quality and Controls Engineer. I left it after two years to join the Ghana Investment Promotion Center where I was trained to become a Project Analyst, and I worked in that capacity for about two years. I was then posted in Frankfurt, as the Director of Ghana Investment Promotion Center for three years. There, I decided to do finance, and I did many courses in finance. I then joined the Bank for Housing and Construction as the Director of Operations. I became the Managing Director of that Bank after two and a half years, and I have stayed with the Bank for 10 years in total. I also worked in the National Investment Bank as the Managing Director during a reshuffle, where I worked for about two and a half years. Subsequently, I had a problem with the government over some issues so, as a result of that, I was literally thrown out of the country in 1990. I established my own private consultancy and I did a lot of work for U.N.D.P., the World Bank and the African Development Bank. In fact, I was one of the first to join the World Bank mission to Uganda. I have worked in Malawi, Kenya, and Tanzania all for various U.N.D.P. and African Development Bank projects. I was one of the experts who did the restructuring of the O.A.U. I joined mainstream politics and became a member of parliament in 1997 for Akim Oda in the Eastern Region. I became the “shadow Minister” for Trade and Industry and after the elections I was appointed as the Minister of Finance.
How do you intend to maintain the GDP growth rate for the year 2001 with the current domestic and world economic problems?
We have a problem with the balance between government revenues and government expenditures. We are hoping to implement three policies at the same time. I have to take a number of initiatives to increase revenue, minimum 45% across board so that we have real growth of revenue. I am also going to hold onto government expenditure in 2000, meaning that there will be no increase in expenditure of government. When I hold onto last year's figures, on which inflation is about 40%, I will literally spend 40% less than the previous year in nominal terms. This policy will not be applied to wages and salaries, which naturally we do not hold. But even there I have to restrict myself to a certain maximum, to ensure that I do not trigger off inflation. We would establish the new Revenue Governing Board. This Board will be responsible for the Internal Revenue Services, the C.E.P.S., the V.A.T. Secretariat and the National Electorates. The idea is to ensure that there are no leakages, which stand currently at about 40%. There are a few new taxes we are raising and this will also go far. The most prosperous sector of our economy is the banking sector, so I am asking that sector to pay a development levy, which is known as National Construction Levy.
What policies will you implement to reduce Ghana's external debt, which is currently in excess of $6 US billion?
Ghana went to the Paris Club in 1983 so if we go HIPC now, technically our external debts up to the year 1983 will be affected. On the other hand, debts after 1983 will technically not be affected, but we are negotiating to include all debts up to 1999. I have every reason to believe it will be accepted, because it has been discussed to the highest level with the I.M.F. and the World Bank. So if it is shifted to include up to the year 1999, we have a big advantage with H.I.P.C., because then we know that 67% of the external debt will be affected by H.I.P.C., which will be a big relief. Presently we are paying about 11.7% of our G.D.P. to service external debts only, and that is about ½4.4 trillion and together with the domestic debt that is about 75% of out total revenue. So if we add our wage bill, almost the total revenue, including grants, is just about sufficient to service debts. The only thing is to get the debt relief in one form or the other and the best solution is to go H.I.P.C.
Why are people against Ghana joining HIPC?
People think that Ghana is rich. We have the commodities of gold, diamonds and cocoa, everything that makes a country rich, but the problem lies in the cash flow. It has nothing to do with resources, but people are confusing resources with cash flow. The negative public opinion is rather based on psychological factor.
In collaboration with the National Board of Small Scale Industries (NBSSI) and the rural banks, an important employment program has been developed.Could you elaborate on that issue?
In Ghana, the informal sector holds the whole country together. We can therefore improve the working capital requirements of the small and medium-scale enterprises.We are going to make it possible at the village and town levels for artisans, mechanics and hairdressers, etc., to expand their operations. The two main difficulties for them at the moment are access to credit and affordability. If we can make credit accessible to them through the use of the rural banks, we believe it will go a long way to help.We have decided that the Poverty Alleviation Fund or Common Fund, which hitherto was used for political activists, will have to be channeled specifically through the rural banks and the N.B.S.S.I. to support the small and medium scale enterprises. In effect, this will enable them to have a working capital and, consequently, increase employment. If you have all the carpenters employing 2 or 3 persons in every workshop, we are going to create thousands of jobs for people. We will also provide all the technical support in the rural areas. Next year, we intend to introduce a Venture Capital Fund to enable people access venture capital, which of course is the cheapest means of financing businesses. This will reduce the cost of borrowing because at the moment the cost of borrowing is around 30% to 42%. We will discuss with our donor partners to assist us in establishing this fund. We already have some grants, so we can use part of the grants to establish the Venture Capital Fund.
What are the donors assisting you in that process?
The donor community consists of three types:(i) The multinationals: i.e., the World Bank, the I.M.F., the African Development Bank, and the European Union Bank.(ii) Then you have the specific [donor countries]: i.e., the U.S., Germany, the U.K., and Japan. These are the bilateral agreements.iii) The third one group is also multilateral, but they do not give any funding as do the F.A.O., U.N.D.P. and I.F.A.D.These are all agencies of the U.N., which are primarily concerned with poverty alleviation but they also provide some grants. They do not usually give loans, only grants. It is better to work such schemes with them.
What are your plans as far as the divestiture of state-owned enterprises is concerned?
The reality is that the D.I.C. has spent years trying to sell companies that cannot be sold. There are still some interesting companies, which the government still has shares in. We intend changing the whole orientation of the D.I.C. in looking at companies, that the government owns shares in which are good companies like Coca-Cola, Barclays Bank, Standard Chartered Bank and Ghana Telecom, etc.We have shares in all these companies, so it is easier for us to divest and release money from these than to talk about selling, for instance, the Ghana Railways.The task of accessing the railway alone can take two to five years. The re-organization will change the orientation of the whole system. I think there was too much corruption associated with the sale of state-owned companies, but we are still planning to continue with the privatization process. | Do you intend to sell of the highly profitable state-owned enterprises, such as the remaining part of the Coca-Cola Company?
We are being pressed so much with debts that it is better to retire some of our debts by selling some of our assets. It does not mean that we are going to sell all the shares. What it means is that we may decide to sell part and leave about 51% or we may decide to sell 30% and leave about 40%. We want to ensure that our presence is still felt in each of these companies. The final consideration of the privatization is not determined yet.
In the past 2 years, two state-owned banks have been privatized under the Government's Divestiture Implementation Program.To what extent have these privatizations affected the banking sector?
When you liberalize the banking system you deepen the financial inter-mediation in the country.This is very beneficial to the private sector because the total assets increase in terms of availability of money in the private sector, which makes the banks more efficient and competitive.The more competitive they become, the better it is for everyone. That is a positive change. I believe in competition, so once you introduce competition into the whole banking sector, it produces efficiency.
The government is committed to strengthening the ability of the Central Bank to supervise the private sector, whilst ensuring that the private sector owns and manages the institutions in the sector. How will the changes affect the relationship between the Central Bank and the private sector?
The Central Bank is in place to regulate the business and the conduct of commercial banks in the country. In the constitution, one will want the Central Bank to be as independent as possible as a regulatory body. Its relationship with the government and the private sector of course is very different. The Central Bank is the issuer of the country's currency. The Central Bank is responsible for setting up the macro-economic framework of the country.We will make sure that the biggest enemy of the poor in society, inflation, will be eliminated.The Central Bank seriously concentrates on the monetary policy of the country and makes sure that inflation is not only controlled but is kept low. We are going to take steps to even amend the Central Bank's law to make it more independent. People think that the Central Bank is not independent enough, although I do not agree with them on that; I welcome whatever suggestion people may offer to help making it more independent.There are so many Ministries, which traditionally handle problems related to the private sector. Even in the Ministry of Finance, there is a desk for the private sector. In the Ministry of Trade and Industry, they have a whole department for the private sector. If you go to the Ministry of Agriculture, they have a whole desk for the private sector. Despite all these desks the private sector continues to encounter a lot of difficulties and problems, which have to be removed.I think that this office should be the office that will advocate for removing all the bottlenecks, which impede the work of the private sector. This should be the advocate the private sector in all government dealings and directions.
What are the primary functions of this Ministry of State for Private Sector Development?
This Ministry tries to remove bottlenecks in the private sector and addresses problems in payment of taxes; problems in getting things from the harbor, which might be associated with bureaucracy; obtaining permits to do certain things, etc.These things should be identified and removed so that the private sector really becomes the engine of growth.We make sure that private sector is able to do certain things freely and speedily. We ensure that there is money and that the private sector is free to borrow from the banks. We will not advocate for money for the private sector, but we will, of course, assist in carrying out various studies, which will assist the private sector to grow.
How do you see the future of the Ghanaian economy for the next four years?
I am very sure that we will bring inflation under control. We also shall put great emphasis on the private sector and create more room for competition.Wherever it is advisable, monopoly will be discouraged within the system. We are going to allow as much competition as possible. We also want Ghana to literally take a stand in the ECOWAS market to enable this country to use it shores because, basically, our people are friendlier than those in the neighboring countries. Our aim is to make Ghana a leading exporter within ECOWAS. We also want to give tourism a push during our (4 year) term.We are planning to reduce the export of primary products. We want to add value to the primary products so that at the end of the 4 years, instead of processing only 18% of our cocoa, we will be processing at least 40% of our cocoa.We also think that the Banking Sector has developed faster than imagined and has to be modernized. I think that our banking sector is still a bit undeveloped.We have too many cash transactions; we should be moving towards using credit cards and limit the use of cash. We want to move away from this into other instruments of business credit cards and all types of financial instruments other than cash for business.
What final message would you address to our readers?
Ghana has gone a long way politically, and politics relate to economics.This is the chance for Ghana to come out as a leading country not only in West Africa but also in Africa. I think we have enough goodwill, enough trained personnel to do it, and now what is required is political management, which, I believe, the NPP government can offer. So, I think we should be on a different track altogether from the rest of our neighbors. We should be different in the next four years because we have an environment that is conducive for development. So if one could come back in four years time you will see a better Ghana and the Golden Age for business will then be realized. |
