President of the Ghana Union Traders Association (GUTA), Dr Joseph Obeng, has called on government to assure the business community of value for money following its announcement of measures to address the economic difficulties.
Welcoming government’s plans in shoring up the economy considering the economic situation, Dr Obeng revealed that the current times in the country demands a lot of sacrifices. As such, government must necessarily plug all loopholes of wastage in the system. This he explained, will ensure government achieve its target for the country.
“Then it also satisfies us because it provides comfort for us that the monies that we are paying, the extra duties that we are paying, is not going in vain… What is left for me, is how to ensure value for money, contracts and wastage in the system. We have to be able to identify those areas of wastages and seal it because that has been the bane of this country. We get the money and one contract alone will take it all and without any good job also done. This is the leakages that we have been suffering all the years. I was waiting for the Finance Minister to give us the assurance of how they will manage wastage in the system and even now, [they] should still come out again and assure us of how we will be assured of value for money”.Dr Joseph Obeng
Dr Obeng indicated that he is happy about the outcome of the Finance Minister’s speech on measures being taken to address the state of the economy as government has demonstrated good fate through its interventions. He noted that despite the fact that businesses are witnessing “increased duties”, government is also making sacrifices by way of “scrapping some of their wages” to sustain the economy.
“Once government is sacrificing, then government will take us along; we are not in normal times… And this is the time that we should also do a lot of sacrifices to salvage the economy. So, it’s in time because for government to have given some pronouncement of $2 billion injection into the economy, means that they are whipping up confidence into the system, which eventually is going to stabilize the currency”.Dr Joseph Obeng
Impact of increase in policy rate on businesses
Commenting on the increase in policy rate by the Bank of Ghana, the GUTA President described as “unfortunate” the Central bank’s decision to have “rushed” into increasing the policy rate. He intimated that the move does not bode well for businesses in the country due to the “high” cost of borrowing.
“You know the problem of businesses in this country has been that of capital acquisition. It does not augur well for businesses at all”.Dr Joseph Obeng
Justifying his stance, Dr Obeng pointed out that the Bank of Ghana “rushed” due to certain factors such as “inflationary trends”. He explained that a critical look at the inflationary trend depicts that the push factor for inflation is the depreciation of the cedi.
“So, all that Bank of Ghana should be doing is to make sure that we stabilize the currency so that it will suppress inflation. If you say that you’re going to use the policy rate to mop up excess liquidity in the system, somebody must even ask you where is the excess liquidity when we keep on saying things are hard. So, it’s only going to aggravate the situation… The main thing we should have concentrated on is to ensure that we stabilize the currency and all other things would have followed; the suppression of inflation and all that, so that if we have [a] reverse of the inflation, then there’s no need to increase the base rate”.Dr Joseph Obeng