The whole talk about diversification is not only the responsibility of the state- Professor Eric Osei Assibey

Economist, Professor Eric Osei Assibey has called for private sector support to diversify the economy for speedy post covid-19 recovery.

According to him, the call for diversification in the economy is a very critical one which calls for collective inclusion from both government and the private sector.

 “Looking more into import substitution products that are going to be produced here and therefore it’s one thing that the business people, having the need to invest in such resources and there’s another thing, the people themselves demanding the product that comes out of the produce.”

Speaking in an interview on the sidelines of the Graphic Business Stanbic Bank Breakfast meeting, he noted that, the patronage of made in Ghana product is dependent on some fundamental attitudinal change and receptivity to it.

“And so, as I mentioned, it’s a collective responsibility. It will mean that we need to have some sort of attitudinal change. We need to have positive attitude towards made in Ghana products, change our taste and preferences towards that. Because if they produce and we don’t demand it, they will not be able to build the necessary capacity that will help them to be able to participate into the global or the regional value chain. And so, we need to start from home, so that the whole talk about diversification is not only the responsibility of the state. It is the responsibility of the private sector, producers and then the consumers.

“All of us have to come together to make it happen, otherwise no amount of investments can really help to sustain production. We’ve seen businesses that have started, [but] often because of lack of markets and demand for their produce they fizzled out”.

On his part, Vish Ashiagbor, a senior partner at Pricewater Coopers, believes that the Bank of Ghana and the commercial banks in the country should be empowered to support businesses to facilitate economic growth.

“Banks mobilize money from depositors and that comes at a cost, so they need to pay that, they need to cover their own cost and perhaps make a small margin on top of that.

“So, if you look at this various inputs, something has to give for the interest rates to come down and the overall economy where you have a certain level of inflation, I don’t think any depositor will be motivated to leave their money in a bank and be losing value. So, the whole macroeconomic equation comes to play when you talk about the interest rates that banks charge.

“Then of course there’s the risk element. I mentioned earlier that those of us in private sector must also take a certain amount of responsibility in terms of how we manage our businesses, how we keep records, because all these things speaks to risks. These are risks the banks try to price and to cover as part of their interest rates”.

Mr. Ashiagbor further noted that, businesses must equally ensure they have  good management practices to reduce elements of interest rates.

“So, to the extent that your business is well run, to the extent that your business has records that are clear, to the extent that your business has good management practices, I think you can reduce some elements of those interest rates.

“But of course it’s not really in your power to get issues such as the level of inflation in the economy for which the bank is also trying to cover and within the bans own control is how they manage their cost which is why a lot of them are also pushing digitization and other things. So, it’s a long standing problem but I think there are efforts going in that direction but it’s a shared responsibility, private sector has a role to also play in that”.