President of the Ghana National Chamber of Commerce (GNCC), Nana Dr. Appiagyei Dankawoso I, has asked government to state the strategies for stabilising the cedi and contain excessive borrowing, the absence of which will crowd out the private sector and toughen the business environment.
In the beginning of the year, a dollar was trading at GH¢4.2077 on interbank market. As at the close of trading on Wednesday March 8, 2017, a dollar now costs GH¢4.4.5114, meaning the cedi had lost about 5.2 percent of its value (year-to-date) more than double the 2.1 percent recorded within the same period last year.
The Bank of Ghana, as part of moves to increase supply of the dollars, earlier this year, auctioned US$69million on the market. However, analysts have described that as unsustainable.
“What is government’s commitment to ensure macroeconomic stability, particularly on the exchange rate? The GNCC is of the firm conviction that by boosting the confidence of the private sector to champion the growth agenda, government will surely achieve its vision of jobs creation and prosperity,” Nana Dankawoso I said.
According to the GNCC president, the key to realising government’s vision, as captured in the 2017 budget statement presented to Parliament last week, lies in implementation.
“In that regard, government needs to come out with a comprehensive implementation strategy that reflects the full understanding of the budget at the municipal and district levels,” he added.
He was speaking at a post-budget seminar organised by the Chamber in Accra on the theme: “Leveraging government’s initiatives in the 2017 national budget for private sector growth”.
The new government captured a number of taxes that it intends to abolish in the short to medium term in its maiden budget in the bid to lighten the tax burden on private sector businesses.
Among the affected taxes include the 1percent Special Import Levy, the 17.5 percent VAT/NHIL on financial services, airlines tickets and selected imported medicines that are not produced locally as well as the 5percent VAT/NHIL on real estate sales.
The business community is, however, skeptical about how these interventions could directly affect the gains of businesses in the absence of a strategy to cap government borrowing and improve on the cedi’s performance against major trading currencies.
To the GNCC, the 2017 national budget affirms government’s commitment is pro-business with a focus on building the most business-friendly environment through private sector development.
Nana Appiagyei Dankawoso said that the tax incentives captured in the budget have revived and boosted the private sector’s lost confidence in the economy.
The GNCC boss called on government to constantly strive to improve the business environment through regulatory impact assessment and reforms for public-private sector dialogue with key stakeholders towards making businesses competitive.