President of the Private Enterprises Federation (PEF), Nana Osei Bonsu, has called on the government to de-risk the private sector in order to grow the country’s economy.
According to him, the private sector is often touted as the engine of growth and it serves as one of the avenues through which the country can tackle unemployment to generate wealth. He explained that in de-risking the private sector, they must be incentivised to venture into areas they normally wouldn’t have done.
Mr Bonsu revealed that the avenues in the private sector are the vehicles and pathways which enable businesses within the sector to create jobs in the country.
“We also need the private sector to be de-risked. No private sector, same private sector business will take a risk in an endeavour and go and invest there. Now, we have GIRSIL, it de-risks the exposure in agriculture, but they only de-risk the banking system; the financial institutions who grants the loans. They do not de-risk the farmer…
“GIRSIL is going to de-risk the [banks] and not the [farmer] because he is a private sector [and] he is not organised. But he is the one that started the ball rolling. So, de-risk opportunities to what we call incentivising affirmative action. So, if you need to create jobs, you need to create jobs in areas where they will keep rolling…”
Nana Osei Bonsu
Speaking on the theme: ‘Tackling Unemployment to create wealth: Opportunities for Ghana’, Mr Bonsu expressed the need for financial resources to be made available to businesses. He indicated that the current tax system in the country makes it difficult for businesses to thrive and also contribute their quota to the country’s growth.
“We also need the financial resources. No business is going to survive without financial resources. Now that we have inflation going sky-high, cost of money is high, cost of doing business is high and the taxes, we have one shoe fits all (25% for all profit margins)… You have micro, small and medium enterprises [paying] 25% of GHC2, 000 which is more impactful than 25% of GHC2 million.”
Nana Osei Bonsu
Investing in businesses for economic growth
In a bid to make the country’s tax system more tolerable for businesses, the President of PEF stated that government must create a “tier tax system” and allow the small businesses to pay the minimum so they can generate enough internal revenue which they can feed into their business.
“Their first allegiance is to their business that is why they established it. So, we should be partners in encouraging the private sector that you have to pay your taxes.”
Nana Osei Bonsu
Mr Bonsu expressed that because the informal sector forms some 86% of the job market as against the public sector which forms 6.2% of the employment pool in Ghana and the private sector which contributes 6.8% of the country’s GDP, it needs a lot more investment. He opined that the informal sector needs to be encouraged and given the necessary resources so they can create jobs.
“Nobody sets up a business to create jobs, they set up a business to make money, and by making money, they need more hands, they expand, the economy will grow and more people will be employed.”
Nana Osei Bonsu
Mr Bonsu emphasized that for the informal sector to receive the needed investment, government must design a policy that will allow this to happen. He indicated that encouragement by building the competencies and capacities of the human capital is required.
“No business is running automation with no human being organising it. So, that kind of monitoring to endow ourselves with the technical competencies and capacities to enable business to do the business [and] to enable businesses to create the jobs, is what we need to do.”
Nana Osei Bonsu
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