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;I i {j ~i·· Proceedings
of the National Economic Dialogue May 14-15,2001
and its Preparatory Workshops April 19 to May 7, 2001
Accra, Ghana
Submitted to:
U.S. Agency for International Development Mission to Ghana
.. for: Trade and Investment Reform Program (TIRP) Improved Policy Reform and Financial Intermediation USAID Contract Number: 641-C-OO-98-00229 .... by:
BDC,Accra
For
Sigma One Corporation
In fulfillment of the following milestones:
1.11 (Y3) Annual National Economic Forum in Fall (September)
.... June 2001 Sigma One Corporation
......
Proceedings
of the
NATIONAL ECONOMIC DIALOGUE
Accra, Ghana
MAY 14 -15, 2001
.'
...
- - ~- ' .. Proceedings of the National Economic Dialogue, May 14-15,2001
Chairman's Opening Remarks
Allan Kyeremanteng The chairman Allan Kyeremateng, started the session off by describing it as an extraordinary general meeting of Ghana Incorporated, welcomed all the participants and hoped that by the end of the proceedings, a course would have been charted leading not only to prosperity but that it would provide the basis for lasting peace and security. He said Ghana needs to make a quantum leap in economic growth. He said the dialogue is about finding answers to three fundamental questions;
• Where are we now; • Where do we want to go to?; and • How and when do we get there?
He cautioned the participants against coming up with a long wish list and advised that recommendations which they come up with must be internally consistent.
Welcome Address
Minister of Economic Planning & Regional Integration Hon. DR. P.K. Nduom Dr. Nduom informed the participants that to ensure an all-inclusive agenda setting process, six workshops were held prior to the National Economic Dialogue. The workshops were under the following themes:
• Poverty Reduction Strategy • Golden Age of Business • Education, Labour Market & Human Resource Development • Economic Policy • Resources for Growth • Financial Sector
They were attended on average by about one hundred participants, who represented political parties, civil society, private sector, students, labour and other identifiable groups and this has ensured that the agenda before the National Economic Dialogue was built out of consensus.
He recalled the Vision 2020 programme implemented by the previous government and explained that given the slow pace of growth, it would take another fifty years to achieve the objectives of Vision 2020. He stressed that in coming up with recommendations, the participants must
. /- learn from what worked and what did not work over the last twenty years. He said it is possible to determine what needs to be done to build a more solid foundation that we can rely on for accelerated growth and development. .r H. E The President's Address President Kufuor re-emphasised some of the thematic areas that describe his vision for Ghana. He said:
• We should build a property owning democracy that will enable our people to defend the right of all citizens at all times. • We will take advantage of vast resources to make Ghana a leading agro-industrial country by 2010. '" • We will create a 'Golden Age of Business' where the private sector is the pillar by which Ghanaians become prosperous. • We will engender a strong spirit of social responsibility. • We will enlarge social and economic infrastructure and our ability to maintain them. • We will resolve to eliminate poverty.
The president stated that in creating the 'Golden Age of Business' all .... sectors, including labour, entrepreneurs, civil society and government should work together with one vision that will allow all to win. He said the National Economic Dialogue should not be seen as another talking shop and that we should concentrate on finding solutions to our problems which are pragmatic in the light of current circumstances. President Kufuor said Ghana can no longer defer what needs to be done today to secure its future. This is why the government has taken so many difficult decisions in its first one hundred days. These include increasing the prices of petroleum products, the decision to join the HIPe programme, and the raising of utility rates.
The president said that there is hope for the country as a number of positive signs are already becoming evident. He said the government's forthright position on the debt situation has led to our development partners to signal an intention to write off a significant portion of our external debt. He promised that the government intends to payoff the domestic debt of r:t.9 trillion by the end of the current term of office. The government had put in place measures to attract foreign direct investment to take advantage of the Africa Growth and Opportunity Act to create new jobs. He said government will shortly sign two agreements with leading .... financial institutions that want to use Ghana as the gateway to West Africa. This will help achieve our objective of making Ghana the leading financial centre in West Africa. The government, he said, will invest heavily in the food and crop growing areas to generate employment and reduce poverty.
NED, May 14-15,2001 2 President Kufuor advised those entrusted with responsibility to work with circumspection and a sense of duty. He predicted a new era that will bring in its stride a confident and free Ghana .
... .. NED. May 14-15.2001 3 ...
SYNDICATE GROUP 1
POVERTY REDUCTION STRATEGY
Chairperson Dr. Sulley Gariba The poverty reduction group was chaired by Dr. Sulley Gariba. The group was given recommendations of preparatory sessions for the Economic '''' Dialogue at GIMPA as discussion documents for the workgroup session.
The discussions of the group centred on five main areas, which are outlined below as follows: .... • Macro-economic environment for poverty-targeted growth; • Human Resource Development and Basic Services • Vulnerability and exclusion • Production and Gainful Employment • Poverty and Governance
The workgroup then established key priority areas for as follows:
• Enhance local governance and strengthen District Assemblies to playa central role in poverty-focused planning, equitable resource allocation and program implementation, and provide adequate financial and increased capacity to perform their mandate.
• Make the Agricultural (food growing sector) as the lead sector for poverty-targeted growth. Within this sector, emphasis should be placed on gender dimensions of the food sector.
• Streamline and make more efficient investments in the social sectors of health, education, water and sanitation to provide increased access and utilization of these services by the poorest of the poor, especially people who are vulnerable, disabled and I", excluded in the mainstream of society
• The locational priority for poverty reduction measures should be in the three northern regions and in specific districts in the Central and Eastern Regions that register worsening poverty trends, through the establishment of Gender-based targeting to ensure that poor women are targeted to gain access to financial and other resources for poverty reduction...... • Establish transparent monitoring and evaluation systems for poverty-targeted programs.
NED, May 14-15,2001 4 Following the establishment of key priority areas, there were comments discussions and recommendations on the various issues, which have been captured under various headings as follows:
DECENTRALISATION o Basic infrastructure (roads, water & sanitation, etc.) should be the responsibility of the District Assemblies. DAs must concentrate on how the provision of such services impact on poverty o DACF should be targeted at development, and should be changed to District Development Fund. o Developments in districts should involve the town and area councils as well as the chiefs and local people. o The principle of 'all hands on deck' should involve mobilisation of all available human resources for the mass production of needs e.g. 5,000 National Service Persons could plant about IS million trees per year . o District Assemblies must focus on increasing revenues. o Increase levels of productivity at the District level. o Issues of gender should be assessed in addressing the issue of vulnerable groups in poverty alleviation. o The Assurances Committee of Parliament should monitor fiscal decentralisation and the DACF. o There should be a ceiling on the levels of public expenditure through enactment of legislation. o Increase the poverty alleviation proportion of the DACF from 5%- 10% o DCE's should be elected to make them more accountable to the electorate.
AGRICULTURE o Targets must be set for selected products, which have markets externally. o Support the poor in agric sector with specific schemes in the areas of health, education and provision of potable water. o Identify areas for target setting and prioritisation o Identify infrastructure needs and appropriate technology for farming and value addition o District Assemblies should assume responsibility for the old state farms as means of employment creation o Make use of cooperatives as a means of assisting peasant farmers to gain access to credit/financial assistance o Districts should collaborate in the management and implementation of programmes and the institution of guidelines for identifying the poor o Food crop farmers should have alternative income generating activities o An industrial plan based on agriculture should be developed on the basis of what can be grown and processed
NED, May 14-15,2001 5 ------... • Emphasis should not only be on production but in the development of export markets in products such as cashew and mangoes • Mobilise youth for farming through institution of awards schemes • Use government funds for the development of plantations to put people into direct employment
HEALTH • Identify health problems of the poor (such as Aids and Malaria) and focus on alleviating or minimising them. • Increase education on balanced diet • Increase screening programmes on health to assist with early detection of illnesses ."" • Identify traditional healers and train them in clinical practices to assist the poor and vulnerable '... • Deepen access to health services for the poor and vulnerable • Develop a water policy as a means of improving health. This would eradicate guinea worm and buruli ulcer. .'" EDUCATION • Improve quality of education in public schools .... • Inputs for education must be sourced locally to create employment • The PTA concept in urban areas should be transferred to the rural areas • D .As should consider gi ving scholarship to pupils in their areas to train as teachers • Adult literacy must be incorporated in poverty reduction I.., programmes • Develop an education development plan • The private sector should be encouraged to set up Health Insurance .... with the government providing a safety net for vulnerable groups • Strengthen vocational and technical education through establishment of more vocation and technical schools and restructuring of their curriculum
Other issues, which came up for discussion, include the provision of employment for seamen through further training and advertising Ghana as a centre of excellence for training seamen. There was also a submission that the development of feeder roads in Ghana would help alleviate poverty through better accessibility to markets and social services and reduced cost of transportation of goods and farm produce. There was a recommendation that the road sector development programme should be accelerated.
With respect to the setting of targets, discussions centred on:
• Use of statistics for targeting poverty prone areas • 60% of poverty alleviation funds to target women • Map out all lands to make it easier for acquisition and development
NED, May 14-15,2001 6 • Allocation of spending in favour of pockets of poverty • Target the private sector as partners in alleviating poverty
Recommendations
1. MACROECONOMY
Required Actions for 2001
1.1 Implement emergency actions to stabilize the economy
• Immediately deliver a credible debt policy that will allow debt stock reduction and a manageable cash flow • Formulate specific plans for quick access to HIPC Initiative and maximize relief to be obtained • Develop specific measures to reduce the fiscal deficit • Increase revenue mobilization and reduce Government expenditure • Immediately develop medium to long-term instruments to facilitate conversion of short tennfhigh cost debt • Reassess external aid policy to lead a reduction of dependency • Ensure that monetary policies are consistent with fiscal policies • Institute mechanisms for consultation with civil society by central and district governments • Sell government shares in businesses with proceeds to be used in reducing the domestic debt • Implement appropriate measures to stabilise the cedi
Measures for 2002-2004
1.2 Establish an environment for sustainable economic growth and wealth creation
• Eliminate the fiscal deficit • Provide an economic and fiscal environment to encourage higher levels of production and productivity • Adopt fiscal policies excluding use of short-term financial instruments and promoting low real interest rates • Introduce output-based salaries/wages system for the public sector • Ensure growth of money supply is consistent with growth of real output • Achieve a better balance between administrative costs and investment in directly productive activities and social protection in government spending • Review trade liberalization measures to promote domestic production • Ensure effective utilization and cost effectiveness of investment by GOG and donors
NED. May 14-15.2001 7 • Use proceeds from di vestiture to reduce public debt • Enforce tax laws to improve collection .... 1.3 Achieve an efficient financial system
• Increase the speed of financial transactions from current rate of three days to one week for clearance of cheques to one to three days • Promote financial sector development and long-term finance • Radically improve the regulatory framework for foreign direct investment (FDI) and domestic investment
1.4 Streamline government expenditures to ensure consistency with overall objectives of the macro economy
• Reduce growth in government expenditure in relation to GDP
1.5 Focus macro policies on poverty reduction
• Increase social spending and target it at addressing the problems of the poor • Significantly reduce inflation
1.6 Make Public Expenditure more productive
• Re-examine decentralisation process to effect the productivity I .., of public expenditure • Use District Assemblies' Common Fund as investments to yield dividends ''''
2.0 HUMAN RESOURCE DEVELOPMENT AND BASIC SERVICES
Education
2.1 Accelerate improvement in the quality of education in public schools
• Provide on a regular and timely basis, basic textbooks to every pupil • Provide all JSS workshops with basic equipment • Institute incentives to attract and retain teachers, with special emphasis on rural areas • Expand training of teachers '..... • Establish District Assemblies as Education Authorities for basic education, including increased responsibilities for human resource management and allocation of resources. • Establish and make effecti ve school management committeeslboards for all public schools in the country
NED, May 14-15,2001 8 • Intensify perfonnance monitoring in primary schools
2.2 Bridge gaps in access to education
., • Establish/strengthen at least one public grade A basic and senior secondary school in every district • Construct and rehabilitate more schools in northern Ghana, rural and peri-urban areas • Provide boarding facilities for girls in senior secondary schools in rural districts • Provide toilet facilities in all schools • Enforce regulations on illegal school fees • Expand provision of school lunches and unifonns in most deprived communities, especially in northern Ghana • Establish community-based incentive packages for construction and rehabilitation of school infrastructure • Provide infrastructure-friendly facilities in schools for persons with disabilities • Expand alternative education programmes, that are linked to ... fonnal education, for children • Expand adult literacy programmes
2.3 Streamline institutional arrangements for service delivery
• Clearly separate policy and implementation roles of the Ministry of Education and Ghana Education Service • Institute separate funding and procurement roles in service delivery • Strengthen civil society involvement in the provision of basic education
2.4 Strengthen vocational and technical education
• Promote the establishment of more vocational and technical schools • Develop facilities in existing vocational and technical schools • Restructure curriculum of technical/vocational schools to provide relevant and employable skills
• Health 2.5 Deepen equity in access to health services
i. Accelerate the reduction of wide geographical gaps in under five and maternal mortality and malnutrition.
NED, May 14-15,2001 9 ------~~--
• Develop and implement a high impact and rapid delivery programme to reduce under five and maternal mortality and malnutrition in Northern Ghana and the Central Region. '" ii. Increase access of the poor and vulnerable to quality health services
• Develop and implement a health insurance (financing) scheme that meets the needs of the poor and vulnerable • Establish effective means of identifying poor for exemption • Improve performance of health personnel in the administration of exemption policy • Institute effecti ve monitoring and evaluation system for exemption policy • Increase health resources (personnel, facilities and funds) to northern Ghana, rural and peri-urban areas • Expand training of health personnel • Establish a college for specialist training for doctors in the country '" • Institute incentives to retain health personnel in the country
iii. Institute specific public health interventions that deal with diseases of the poor '...,
• Expand prevention and effecti ve treatment of malaria • Eradicate polio, guinea worm, trachoma, onchocerciasis, bilharzia and buruli ulcer • Accelerate the reduction of tuberculosis • Expand quality essential obstetric care to all hospitals and health centres
2.6 Enhance efficiency in service delivery
i. Streamline institutional arrangements for health service delivery
• Further decentralise health service delivery for greater involvement of district authorities and NGOs • Institute community based health service delivery • Establish Regional Health Authorities with greater HR management and approval responsibilities • Clearly separate policy and implementation roles of the Ministry of Health and Ghana Health Service • Institute separate funding and procurement roles in health service delivery • Ensure horizontal integration of activities of DHMTs and District Assemblies
NED, May 14-15,2001 10 ii. Strengthen inter-sectoral action to meet the broad health needs of the poor and vulnerable
• Strengthen mechanisms for integrated planning and coordinated coordination
iii. Reduce the incidence and growth ofHIVIAlDS
• Intensify awareness on prevention by publicity campaigns • Increase the number and coverage of voluntary counselling centres w • Increase the effectiveness and coverage of treatment services • Reduce the prevalence of STDs
Water and Sanitation
2.7 Increase access to safe water and sanitation facilities
• Develop capacities of the public, private and NGO actors in the implementation and management of potable water and sanitation delivery • Increase potable water coverage • Enforce laws on provision of sanitation facilities by landlords • Expand schemes to increase household sanitation facilities • Increase the efficiency of and decentralise Ghana Water Company and the Community Water and Sanitation Agency
2.8 Integrate hygiene education into water and sanitation delivery • Promote behavioural change in personal hygiene and water use practices • Provide information, education and communication to maximize effects of facility provision
2.9 Ensure sustainable services to communities • Increase the level of domestic funding by government and communities in safe water and sanitation • Strengthen mechanisms for integrated planning of water, sanitation, education, health and food security • Promote community participation in planning and implementation of water and sanitation facilities and services • Ensure proper assessment of the quality and quantity of water resources • Improve on training for water management at all levels • Ensure provision back-up services for implementation and maintenance of water faci lities
Population growth rate
2.lO Institute a major national campaign on fertility management
NED, May 14-15, 20(H 11 3.0 VULNERABILITY AND EXCLUSION
3.1 Expand the coverage and effectiveness of safety nets to deliver essential services for poorest groups and geographical areas through:
i. Ensuring care and support for the people with HIVIAIDS and their families
• Develop and support the implementation of a programme for free counselling and treatment of HIVI AIDS and STDs for commercial sex workers • Develop and support the implementation of community- based programme to support people with HIV/AIDS(PLWHA) and their families • Support the implementation of continuous training for service providers on caring for PLWHA
ii. Expand coverage of social security schemes by 1,000,000 workers
• Increase the effectiveness of social protection schemes, including the Social security and National insurance Trust (SSNIT) • Support the development and implementation of additional social protection schemes to cover majority of workers
iii. Expand special programmes to support poor elderly citizens
• Expand provision of day care centres for the elderly
iv. Upgrade slums
3.2 Developing systems that enforce rights on protection
i. Reduce the number ofpeople who are victims of child betrothal, "'" child marriage, female genital mutilation and trokosi.
• Intensify advocacy against child betrothals and abuse of children • Intensify awareness on the Convention on the Rights of the Child and the Children's Act, especially provisions against child labour • Enforce legislation on trokosi, female genital mutilation (FOM), and other laws on protection
u. Reduce the level of stigmatisation and discrimination against people living with HNIAlDS and their families
NED, May 14-15,2001 12 .,------~------FIDA, of the judicial system, CHRAJ, Strengthen the capacity • HIV -related issues Legal Aid Board to address fomls are victims of the worst the number of children who iii. Reduce of street children of child labour and the phenomenon Programme on elements of International Design and implement • (IPEC) in major towns Elimination of Child labour to cases of prevent and rapidly respond • Strengthen systems that abuse. in all and Juvenile Units (WAJU) Establish offices of Women • towns regional capitals and major ., • Strengthen CHRAJ on of Ghana National Commission • Strengthen Regional offices Children (GNCC) ..j with disabilities women, children, persons iv. Promote the rights of and the elderly on gender of law enforcement agencies • Intensify sensitisation Issues gender to more effectively address • Streamline legal system property of freedoms and to protect violence, violation and the based of children, the elderly rights of spouses and protection disabled on the poor and mitigating their impact 3.3 Preventing disasters and man-made disruptions caused by namral i. Significantly reduce the northern savanllah ~ disasters, especially in early warning systems • Develop predictive fonn and scale of for establishing the nature, .. • Develop methods affected and alleviation of those a disaster, remedies, in techniques in support disaster management between disaster means of communication • Establish effective prone areas and Accra II; GAINFUL EMPWYMENT 4.0 PRODUCTION AND for economic environment as a catalyst 4.1 Support the rural transformation Agri-business Zones establishment of Accelerated • Promote the Plains .. savannah and the Afram in the northern refonn • Promote land administration
J3 NED, May 14-15,2001 • Provide incentives to attract entrepreneurs into agriculture agro-industries and • Vigorously encourage and support agro-industries targeted the export market at
4.2 Increase agricultural yields on an environmentally basis sustainable "t
• Promote farming practices that improve soil fertility conservation and water through training and extension at community level • Rehabilitate and maintain existing irrigation projects at the 'lofT District Assembly level • Introduce crop varieties that can be produced during the dry season in the northern and coastal savannah. ,.. • Provide dugouts and other small irrigation facilities for season farming dry in the northem and coastal savannah • Review and expand coverage of inventory credit ~~ schemes and incubator • Review and address constraints facing the Village Infrastructure Project ~i • Develop and implement schemes to provide access to equipment by aqua-culture farmers .... 4.3 Improve market access to agricultural producers • Ensure regular .... release of the Road Fund for regular rehabilitation and maintenance of feeder roads Expand and bridges • revenue sources for the Road Fund • Build additional feeder roads particularly in the Agri-business Accelerated Zones and in Northern, Volta and north-eastern BrongAhafo • Strengthen the ~ Department of Cooperatives to facilitate establishment of marketing groups • Promote the construction of locally based storage facilities. .... • Improve marketing and distribution systems to achieve competition i.J 4.4 Promote agro-processing to serve as ready market for agricultural produce
• Expedite divestiture of state agro-processing firms • Support the development nuclear farmer out-grower schemes that are linked to processing units • Locate and strengthen rrrus and relevant CSIR units business in Agri- and Small-business Enterprise Zones • Expand credit support :,..., packages for small and micro enterprises in the informal sector
NED, May 14-15,2001 14 4.5 Improve productivity in the industrial and service sectors
• Establish Small-business Enterprise Zones with support infrastructure, information on new production techniques and ITIU advisory services in profitable locations in Tamale, Takoradi, Cape Coast, Ho • Strengthen the Departments of Metro and Municipal Assemblies responsible for enterprise development. • Strengthen NBSSI and ITIUs to be more entrepreneurial
4.6 Maximise employment generation from rural infrastructure provision
• Increase the number of labour-based contracts to improve feeder roads while increasing employment
4.7 Ensure regular release of the Road Fundfor regular rehabilitation and maintenance offeeder roads and bridges
4.8 Expand revenue sources for the Road Fund
4.9 Build additionalfeeder roads particularly in the Accelerated Agri-business Zones and in northern Volta and north-eastern BrongAhafo
Energy iijIi 4.12 Improve energy provision for production by the poor ,. • Increase access to sustainable energy sources - biomass. solar. and wind energy • Increase efficiency of the Volta River Authority. Electricity Company of Ghana and Northern Electrification Project i. • Introduce renewable energy technologies. • Promote the productive use of electricity by rural areas and the 1.1 poor • Expand establishment of community woodlots • Introduce and promote energy efficient technologies for ,fiI domestic users 5.0 POVERTY AND GOVERNANCE
5.1 Improve leadership and management capacity ofstole, civil society and the private sector for ensuring effective public policy 11/11 I. Strengthen leadership and vision for poverty reduction and wealth creation
NED. May 14-15.2001 15 ------_.__ ._._-----
• Reschedule the NIRP, PUFMARP and CSPIP to be completed - in the short to medium term • Institutionalise permanent consultation procedures between government and ci viI society • Engage Traditional Authority within policy formulation and ..., implementation • Strengthen institutions responsible for long-term planning and monitoring for poverty reduction and wealth creation • Determine and rationalize roles and procedures of institutions central to poverty reduction and wealth creation particularly between NDPC and MOF • Strengthen PPMEDs, RPCUs and DPCUs and determine and rationalize their roles and procedures in support of poverty reduction • Rationalize and strengthen the roles of Departments of Social Welfare and Community Development in poverty reduction • Institute rigorous monitoring and evaluation from national to local level
5.2 Enhance local governance
i. Accelerate decentralisation
• Harmonise legislation related to decentralisation • Fully implement decentralisation policies including fiscal decentralization • Develop mechanisms and build capacity for integrated planning and composite budgeting by DAs • Review on-going programs in public financial management reforms, including MTEF to support and be consistent with decentralisation • Elect Chief Executi ves for greater accountability
ii. To build local capacity for partnerships with the private sector and communities for efficient delivery of urban and community services
• Strengthen client-orientation and demand-responsiveness of local government institutions • Reorganise management of cities for effective utilization of investment and efficient delivery of services
iii. Develop revenue generation and financial resource capacity
• Strengthen capacity of District Assemblies to identify alternative sources of revenue and innovative means of collection ..... • Develop capacity for creative financial management aimed at the generation of district resources NED, May 14·15,2001 16 ... • Foster and support partnership with the private sector, civil society and NGOs in the generation of resources and wealth at the district level
5.3 Improving public participation, transparency and accountabiliiy in policy formulotion and management
i. Increase participation in, and ownership by social partners of budgeting and expenditure management
• Enact law on access to public information • Enhance the capacity of social partners to access and utilize information on public policy making and management • Build national support for the Ghana anti-corruption action programme • Strengthen traditional mechanisms for arbitration
ii. Ensure transparent monitoring of expenditures on poverty reduction
• Establish mechanisms for budget review with social partners at ,. the district and national levels • Build capacity of civil society organizations to effectively participate in poverty monitoring at national and local levels of governance • Strengthen Public Accounts and Finance Committees of Parliament to effectively review and approve national budgets • Establish mechanisms to facilitate monitOring by communities • Establish an independent Poverty Expenditure Monitoring Commission involving representatives of the social partners • Streamline expenditure forecasts to clearly identify production acti vities, social protection and administration
..
NED, May 14-15,2001 17 SYNDICATE GROUP 2
FINANCIAL SECTOR
Chairperson Dr. Sam Mensah The Financial Sector syndicate group was chaired by Dr. Sam Mensah and was supported by Dr. Nii Sowa (CEPA), Dr. Asenso Okyere (ISSER), and Nana Opoku (Gold Coast Securities). The group was given recommendations of preparatory sessions for the Economic Dialogue at GIMP A as discussion documents for the workgroup session.
The main thrust of the discussions centered on four areas, which are outlined below:
• Long - Term Capital for Growth • Ghana: Leading Financial Centre in West Africa • Domestic Debt • RIPC
The resource persons for each of the areas gave a background of the main areas to be discussed and gave an overview of the recommendations arrived at preparatory workshops. , ...
The recommendations then formed the basis of discussions of the syndicate group. •..
Main issues that came up during the discussions ofthe recommendations included:'·
Long Term Capital For Growth
• Legal, regulatory and supervision weaknesses reflected in out dated laws: Exchange Control Act and the Banking Law. .... • Attracting Long term Capital from International Markets • Macroeconomic Factors - fiscal policy and crowding out effect and the need for a balanced budget law or any such law to create macro economic stability to attract long-term capital. • Attracting Domestic Savings - Lack of competitive pension schemes, and tax exemptions for long-term saving plans.
Ghana: Leading Financial Centre for West Africa
• Legal and regulatory framework - Inhibitions to foreign exchange transfers and inconsistencies with other countries in the sub region. • The slow and inefficient financial services that currently exist "" • Weak macro economic indicators • Weak telecommunications base
NED, May 14-15,2001 18 Domestic Debt
• Actual size of Debt - central government, municipal and local government, state Owned enterprises and sub vented organisations. • Lack of transparency in how loans are contracted by municipal and local government, State Owned Enterprises and sub vented organisations. • Limited availability of different forms of financial instruments on the markets, placing a limitation on the forms of debt held. • Short-term nature of the debt • Inability to differentiate between monetary and fiscal instruments
HIPC
• How to increase export earnings to increase revenue • Monitoring and Evaluation of Public finance, External Accounts, Special statutory Funds, and progress in Poverty Reduction.
RECOMMENDATIONS
Long Term Capital For Growth
1. Implement Schemes To Increase Long Term SavinglFunds
Action Plans:
• Review tax laws to create level playing field between SSNIT and other pension plans/saving Schemes • Contributions to supplementary pension plans should be tax deductible on the sarne basis as SSNIT • Pension payments should be tax exempt on the basis as SSNIT • Reduce required percentage of SSNIT contributions to free up funds for supplementary pension schemes. (MOF)
• Grant tax exemptions for long term savings plans. (MOF) • Examples of such funds are • Educational Savings Plan • Home Ownership Savings Plans • Individual Retirement Savings Plan
For the above schemes:
• Contributions up to a specified limit will be tax deductible • Income on the savings will be tax free as long as the funds remain in the scheme
NED, May 14-15,2001 19 • Withdrawals from the scheme for the approved purpose (e.g. education, homeownership, retirement) will be tax free • Withdrawals for purposes other than the objective of the scheme will be fully taxable.
2. Prudential laws should be put in place for fiscal and monetary management
Action Plans
• Convergence criteria for the second monetary zone for West Africa (W AM zone) should be passed into law. (MOF/parliament) - within 6 months
The convergence criteria
• Reduce inflation to 5% by 2002 • Deficit financing by the Central Bank should not to exceed 10% of previous year's fiscal receipts. • Budget deficit of 4% of GDP by 2002 • Foreign exchange revenue should cover 6 months imports by 2003.
3. Implement The Financial Sector Strategic Plan (2000).
Action Plans: i...
• Establish an Oversight Committee comprising the private sector and responsible ministries and agencies. (SEC, BOG, MOF, MEPRC, to monitor implementation. (This team should quarterly)
• MOF should create a desk to implement the strategic plan. (Immediate)
4. Develop Credit Information System
Action Plans
• Facilitate the establishment of credit information agencies (BOGlPrivate Sector)
''''
NED, May 14-15,2001 20 Enforce a national identification scheme (Within the next 5 years_ (Short term - NI & TIN numbers) (SSNITIIRS) • Adapt SSNIT No_ for individuals already under SSNIT for personal identification. (SSNIT) • TIN should be used as identification of Corporate Bodies (This is already in place but should be done more effectively. • The SSNIT No. and TIN should be mandated for all financial transactions. BOG, SEC, IRS, and NIC should regulate this.
Babies born should be issued with SSNIT numbers as a form of Personal Identification. (Long-term - This should be done by the Birth and Deaths Registry in collaboration with SSNIT within 5 years.
5. Encourage Foreign Portfolio Invesmlent
Action Plan
• Remove restrictions on foreign participation in companies listed on the Ghana Stock Exchange to make Ghana competitive. (MOFIBOG)
GHANA: LEADING FINANCIAL CENTRE IN WEST AFRICA
1. Review & Improve Legal/Regulatory Framework
Action Plans • Harmonise insurance regulations with Francophone West Africa countries with CIMA Code. (MOF/ The Commissioner) • Review exchange control legislation. (BOGIMOF) • Establish commercial courts. This should be done within overall proper judicial reforms. (Ministry of Justice and Attorney General). • Establish proper bankruptcy/insolvency laws. (Attorney General) • Investigate the feasibility of establishing a deposit insurance scheme for small deposits in the short term. (BOG)
2. Create An Offshore Financial Centre
Action Plans • BOG is tasked to spearhead the development of Ghana as an offshore financial centre. -Identify what it takes to get there -Establish framework -Implement it 3. Develop New Financial Products And Markets
NED, May 14-15,2001 21 ~ ______M ______
Action Plans • Bank of Ghana should facilitate the introduction of new financial products. (Private Sector Market Driven) - Mutual Funds - nit Trusts - Futures & options - Other deri vati ve products - Housing bonds • Develop adequate regulatory framework for new products (BOG)
4. Improve Human Resource And Technology
Action Plans • Develop a strategic planning program to come up with initiatives to '''' open up and improve the telecommunication industry - Government should consider further liberalisation of the telecomsltelematics industry to support the development of the i"" financial centre. - Monopoly position of Ghana Telecom should be reviewed to create a level playing field 'Wi
• Develop bilingual capacity to enhance transactions with neighbouring countries in the West African sub region "." French should be included in the curriculum of schools up to the SSS level. This should be made compulsory for all students.
DOMESTIC DEBT
1. Determine On An Ongoing Basis The Size Of The National Debt
Action PUIns
NED, May 14-15,2001 22 • Capture debt incu"ed by local and municipal authorities, state owned enterprises and sub vented organisations and the size ofpayment a"ears. - Ministry of Finance should set a mechanism to: • Capture all existing and new debts of local and municipal authorities, state owned enterprises and sub vented organisations and the size of payment arrears up to date • Monitor all debt incurred by the local and municipal authorities, state owned enterprises and sub vented organisations (loans should not be contracted by these organisations without reference to the MOF)
2. Restructure Debt
Action Plans
• Bank of Ghana should differentiate between monetary and fiscal instruments. • Proceedings of meetings of the Open Market Committee should be published weekly. (BOG)
HIPC
1. Increase Export Eamings
Action Plans • Implement Cocoa Development Strategy (rehabilitation of abandoned farms, increase farmers price to 70% of FOB, and use high yielding clones • Raise output of cocoa to 500,000 metric tonnes per annum in 4 years and add 40% value in processing • Focus on gold based jewellery, garments and textiles. Take advantage of AGOA for garments and textiles export (immediate) (GIPC, Export Promotion Council). • Focus on Agric products for exports - cassava, pineapple, cashew, mangoes and ostrich. • Government should support to increase the output of handicrafts and other horticultural products within 1-3 years
2. Monitoring And Evaluation
Action Plans • Public Finance Ensure effective monitoring and evaluation of the public finances (Revenues and Expenditures) and publish on quarterly basis. (Parliament! MOF !BOG IGSSI Auditor Genl Accountant GenJ Sector Ministries) • External Accounts
NED. May 14-15.2001 23 -""Be ,,'
Ensure effective monitoring and evaluation of the external accounts (Balance of Payments) on a quarterly basis, (BOG I Statistical Service) • Special Statutory Funds DACF Road Fund Education Fund Export Development Fund
These funds are to be monitored and published to ensure that they are properly utilized and accounted for on a quarterly basis. (Auditor General).
• Progress in poverty reduction Set up system to effectively measure progress in poverty reduction on a periodic basis using appropriate indicators. (MEPRC I MLGRD/NGOsl Statistical Service)
• Maintain a stable macro economy and pursue tight monetary policy to control:(GSSI BOG IMOF) Report on macro economic indicators as follows: • Under age 5 mortality (2 years) • Maternal Mortality (2 years) • Wage rate and Employment figures (monthly)
There should be pre - programmed release dates for all data from the Statistical Service.
• Governor of BOG and the Minister Of Finance should make quarterly statements as to the position and progress towards attainment of inflation targets,
....
NED, May 14-15,2001 24 .. SYNDICATE GROUP 3
EDUCATION, LABOUR AND HUMAN RESOURCE DEVELOPMENT
Chairperson K. Anang (Mrs.) Rose to For the benefit of participants who were not part of the workshops prior the National Economic Dialogue, Resource Persons presented an overview were of the discussions and recommendations that were made. Participants given the opportunity to debate them and make additional or alternative and suggestions. This was done with the objective of arriving at practical feasible recommendations. ., A key concern regarding Education was, the need to meet the constitutional requirement of free basic education for all. It was emphatically stated that any country that cannot meet such a requirement is simply not committed to it.
Discussions were also held on the following areas of concern: • The lack of an education industry • The importance of pre-school education • Financing Education
On labour and human resource development, participants indicated that the long-term growth and sustain ability of the Ghanaian economy would be unattainable without a dynamic and efficient labour market. To achieve this, discussions were focused on the following priority areas:
• Inadequate Labour Market Information Systems • The lack of competitive wages between the public and the private sector • The lack of labour mobility and skill matching • Income Security • The challenge of the increasing numbers of under employed people • The impact of unresolved industrial disputes on the economy • The role and value of training to manpower development
Health insurance was identified as an ideal option for financing healthcare in Ghana. This recommendation which was presented at the previous workshop was critically assessed because participants admitted that against the current situation, it covered the scope of the challenges of healthcare financing. The discussions for its approval focused on:
• The inadequacy of the present system of healthcare financing • The current state of the healthcare delivery system • The ability of the average Ghanaian to pay health fees • The demographic impact of alternatives to health care financing • Reasons for previous unsuccessful health insurance schemes
NED, May 14-15,2001 25 Recommendations
EDUCATION
1. Government must meet the constitutional requirement of basic education for all • Undertake a full costing of providing "Free basic education" with the aim of detennining the deficit needed to be covered. (by 2002 budget)
• Financing of the deficit should be through: Joint collaboration with communities and District Assemblies Private sector participation, activated through the provision of special fiscal incenti ves
• Pre-school and its accessibility should be promoted through joint action between government, the communities and NGOs, to address the existing disparities. (Within 3 months)
• Government to continually promote girl child education to address the disparities in enrollment.
2. Take immediate steps to increase cost effectiveness in educational management • MOE to undertake a management audit and draw regular management training schemes for those in supervisory and higher grades. • Promote an educational industry Government to redefine its role in education delivery, with the view to allow the pri vate sector to develop its capacity in the production and distribution of books and other teaching materials. This would include: Teacher training \u;, Curriculum development with stakeholder participation Certification - Provision of infrastructure Inspection & monitoring
3. Education and curriculum structure development process to reflect national aspirations and creativity which is demand driven and non partisan. • Promote the establishment of relationships/partnerships between educational institutions, the private sector and civil society. ,...
(E.G. The Committee for the implementation Memorandum of Understanding between tertiary institutions and the private sector.)
NED, May 14-15,2001 26 4. Financing Education • Government to meet the direct cost of basic education • Government to reduce focus on provision and subsidization of secondary and tertiary boarding facilities • Strengthening mobilization and management of the education fund, • Private sector or corporate to be encouraged to fund research and attachment programs. • Traditional authorities, NGOs, religious bodies, civil society, etc. '. • Commercialization of research ... 5. Develop knowledgeable, skilled and competent lobour force to meet the needs of a competitive economy. (Improve productivity & quality ofthe labour force) • Assessment of manpower requirement • Assessment of manpower availability • Assessment of manpower development capacity • Human resource development institutions should focus on improving skills and problem solving competencies at all levels. Review and streamline governments role in entrepreneurial technical & vocational training Provide institutional framework for the promotion of the overall objectives of HRD.
104 LABOUR MARKET & HUMAN RESOURCE DEVELOPMENT
6. Enhance labour mobility and skill matching • Make labour market information systems more effective through the rehabilitation of public employment centres, and retraining of their officials. ,~ • Strengthen linkages between the private sector and and human resource development institutions. • Further develop the social infrastructure, redesigning more ~J portable income protection schemes. • Provide multi-skill 0 the job training programs for employees. ,.J • Integrate rigorous career counselling in academic programs at all levels. • District Assemblies should take charge of providing financial incentives for employees in deprived areas . .- • Institute an "Equal opportunity Employer Award. This should be based on gender sensitivity and openness in recruitment. .of 7. Government to provide enabling environment for the creatWn and promotion of high wages and high productivity jobs. i • Improve labour absorption capacity •• Strengthen the export sector Land tenure reform
II. NED, May 14-15,2001 27 ~*______.. u_~ __~.~_. ______. ______
fiscal incentives for private sector investment in '- processing, packaging. marketing etc.
• Improve the quality of public service through competitive income policy.
8. Promote congenial industrial relations environment for private investment and employment growth • Enact the new Labour Law by Dec. 2001 • There should be quick resolution of industrial disputes • Promote the application of core labour standards ... 9. Create immediate opportunities for urban and rural underemployed • Improve employment and income opportunities (3 months) Information for new business start ups Cocoa spraying Reafforestation Estate development Food Production (processing) Traditional farming Sanitation
• Promote community based vocational and technical skills training for occupational and industrial groups. This should be done through the coordination of training activities
HEALTHCARE FINANCING OBJECTIVES
10. Provide adequate & sustainable access to healthcare of reasonable quality for the entire demographic configuration of the population.
11. Remove direct payment at health delivery points and ensure a more efficient financing of healthcare
12. Establish a user-friendly and cost-effective administration of healthcare ""I
FINANCING OPTION 1: HEALTH INSURANCE
1. Replace the cash and carry system with a Multi-Fund Health Insurance Scheme that reflects the demographic configuration of the Ghanaian population - Formal sector employees; Urban informal sector; Rural informal sector; Pensioners; Cocoa and other farmers registered with COCOBOD; the poor, elderly, disadvantaged and destitute.
NED. May 14-15.2001 28 Government to establish a special independent institution (e.g. National Health Insurance Organisation) to help develop and promote the informal sector schemes. The following health insurance schemes to be promoted:
• Government Employee Health Insurance Fund • Private health insurance schemes • Cocoa farmers/ COCOBOD Health Insurance Scheme - • Non-Profit Health Insurance Schemes - Health Maintenance Organisations (for the urban informal sector) • Community Financed Health Insurance Schemes (for the rural informal sector) • Pensioners Health Insurance Fund • Medical Aid Schemes for the poor, elderly, disadvantaged and destitute)
Pilot schemes should be set up at targeted areas for no more than 1 year for evaluation
2. Establish a Central Health Fund to ensure a healthy balance between such social goals as solidarity, equity and quality on one hand, and financial sustainability on the other hand. The fund should be set up within 3 months of the establishment of the recommended National Health Insurance Organisation which will over see the promotion of the initiative. Options for sources of funding for the CHF, should consider raising funds from V AT, health tax on tobacco, insurance companies, the banks, churches, voluntary donations etc.
3. Other uninsured/self·insured who have the ability to pay a fee·for· service basis should be able to enjoy quality health care services at an affordable cost.
4. Develop and implement a weU·planned and vigorous educational campaign to sensitise the public about the benefits of healJh insurance
NED, May 14-15,2001 29 SYNDICATE GROUP 4
ECONOMIC POLICY
Chairperson:
Dr. S. Ashong Prof. F. Gockel The discussions that were held in the Economic Policy Workshop covered three main topical areas for which recommendations were made at the pre workshops at GIMP A. These were: • The current state of the Ghanaian economy • Fiscal stability in Ghana • Macroeconomic stability in Ghana
These topics are interrelated, and in fact each of the papers presented at the GIMP A have a common position: fiscal indiscipline is the bane of Ghana's macroeconomic problems.
The procedure of the workshop involved: • providing the highlights of each of the papers presented at GIMPA; • presenting all the recommendations arrived at for each topic area; and • holding workgroup discussions on the above-mentioned recommendations.
At the end of the workshop, the group came out with concrete action plans for the recommendations. There was also a consensus for laying down policies for the long-term growth and development of Ghana. These are all listed in the ensuing section.
Recommendations
I. STATE OF THE GHANAIAN ECONOMY: A MACROECONOMIC PERSPECTIVE
1. IMPROVE RESOURCE MOBILIZATION
• Create special bank account for Ghanaians in the Diaspora - Create the opportunities and incentives for Ghanaians outside to invest in the country as part of efforts to improve mobilization of resources. - Set up a committee, which would be charged with detailing the modalities of these incentives. - The Ministry of Finance (MoF) would be responsible for:
NED, May 14-15,2001 30 - • Establishing the Committee. The members of this Committee will be drawn from the Finance Ministry and from other sectors of the economy. • Ensuring the facilitation of this recommendation.
• Critically Examine Import Exemptions and Reduce to Barest Minimum by January 2002 Introduce mechanisms to halt the abuse of import exemptions. Institutional leakages by CEPS and GAPOHA must be substantially reduced. ... Companies! institutions enjoying import exemptions and a list of all the items that are exempted should be widely publicized. For example, such a list could be published in the Gazette for the perusal of Parliament. Review statistical underpinnings of the exemption system to increase transparency. Tax revenues can be enhanced through simpler customs duties (no more than two non-zero rates). MoF would be responsible for the development of these duties. Encourage private sector participation in eliminating the abuse of exemptions and evasion of custom duties. Consider setting up a task force to perform a thorough study to deal with overall structure of import exemption system.
• Strengthen Tax Collection Agencies and Procedures
District Assemblies and Regions must be clearly defined and adhered to by all the Ministries of the State to ensure efficiency in revenue collection and in the decentralisation process in general. District level agencies must be assigned certain responsibilities to complement Central Government's role in revenue collection. District Assemblies must be held liable for all the activities for which by law they are allowed to do to ensure harmony and efficiency. Examine property taxation at the national level and within the context of economic development. Provide incentives for tax collectors. Increase coordination and efficiency in tax collection through improved networking by tax agencies Establish tax audit authority
2. DOMESTIC DEBT MANAGEMENT
• Restructure Debt Instruments from Short to Medium-Term Implement effective fiscal policies that would ensure relief on t/Ii domestic debt.
NED, May 14-15,2001 31 ------_..... _-_ .•
,,,' Reduce levels of inflation and direct debt relief from HIPC initiative towards poverty alleviation programmes. The restructure of debt must be market determined. '''' Government must borrow more long-term and less short-term instruments_
• Divestiture proceeds should be used solely for the use of servicing domestic debt Identify stock of national assets and create register Take an audit of all arrears (what is still owed from the divestiture programme)...... Institute a programme of ensuring that all the arrears are recovered in real terms. Divestiture process should be reviewed to enhance transparency in "'~ asset valuation and payment terms.
3. EXPENDITURE .. ~
• Complete all viable projects before undertaking new ones. Institute a programme of expenditure management and budget execution to ensure transparency and to enable the Government effectively monitor and control all its expenditures. • Expenditure monitoring should be on accrual basis and not on cash basis, • Review MTEF system and ensure that MDistrict Assemblies .111 must have proper authority to carry out programmes, which are outside the budget. • Ensure that information required for planning & budgeting is timely. • Budgetary proceedings must start as early as possible to ensure that the guidelines and parameters are established for the Budget. • Undertake an audit of all existing projects. Transfer projects that can be executed at the district level to District Assemblies together with funds Review procurement and contract system to develop clear guidelines regarding procuring and awarding of contracts ,.. • Reduce expenditure on transportation Introduce a system of monitoring the use of Government vehicles. For example MDistrict Assemblies must ensure that the proper authorisation is given for the use of vehicles outside working hours. Make a distinction between government officials entitled to personal cars and cars in pool.
II. FISCAL DISCIPLINE
NED, May 14-15,2001 32 .. • Government borrowing should be closely monitored and controlled An aggregate borrowing ceiling should be established by Parliament Parliament must have complete oversight over Government's borrowing levels. The necessary capacity must be developed in Parliament in order to carry out this objective. Central Bank Governor should report to Parliament regularly. .... Strengthen institutional capacity of MoF to implement an accrual basis reporting system • Set up a Debt Feasibility Analysis Unit at MoF to liaise with BoG for effective domestic debt management.
• The Budget process should be modified to include defined output indicators with sectoral budgets. All Government programmes must be output oriented in the medium term. These outputs must be supported with the required resources to achieve optimum benefits.
ill. MACRO-ECONOMIC STABillSATION
• Review Ghana's Banking Laws in consonance with Constitution and taking into consideration the following action plans. Enforce the independence of Bank of Ghana • Reduce number of Government appointees on the Board of BoG and replace with technocrats. • Include licensing & liquidation of banking institutions in BoG responsibilities • Include Exchange Controller in BoG Governor's responsibilities Harmonise the definition of money (M2+) with existing exchange control and legal tender regulation • Banks should be allowed to keep reserves in currency in which they were mobilised Increasing transparency of BOG operations • Increase transparency particularly in OMO and foreign exchange operations • Establish an effective public affairs unit • Disseminate information through publications and workshops Design and implement an orientation program for BOG staff and the banking industry • Develop an orientation program comprising workshops, training, and publications. Restrict borrowing by Parastatals
NED. May 14-15.2001 33 ~------.------
• All current accounts of Parastatals (VRA, ECG, GNPC and TOR) should be closed and transferred to commercial banks. • Restrict all loans (either directly, indirectly or guaranteed by Government) to parastatais.
IV. OTHER ISSUES
• Implement policies aimed at long·term growth and development of the country. Implement policies to change the structure of the economy by minimizing our dependence on exports of primary commodities and exporting value added manufactured goods. Increase the competitiveness of Ghana. Consider technology, capital mobilization & Ghana's competitiveness as important issues in growth and economic development. • Accelerate regional integration as basis of widening Ghana's markets
'"
....
.....
NED, May 14-15,2001 34 SYNDICATE GROUP 5
.. GOLDEN AGE OF BUSINESS
Chairpersons: ... Mrs. Baeta-Ansah Mrs. Villars
Mrs. Baeta-Ansah and Mrs. Villars chaired the Golden Age of Business working group. The Minister for Private Sector set the tone for the discussion by the group by outlining three main areas that affect the ... business sector in Ghana. The three areas he urged the group to consider during their discussions are:
- High Interest Rates; - Lack of long term capital; and - Competition -liberalisation.
The Minister for Trade and Industry Hon. Dr. Apraku also gave an introduction to some of the factors that needed to be considered during the two-day session by the Golden Age of Business Group. In his presentation, Hon. Dr. Apraku encouraged the group to explore and determine ways in which the private sector can flourish and also be able to compete in the global market with goods and services that meet international standards.
Papers that were presented by experts in the various fields at the preparatory workshops towards the National Economic Dialogue held at GIMPA on the 20th of April were summarized and presented to the group. The summary topics presented include: Trade Reform Liberalisation, ECOWAS and Regional Integration, and Information Technology as a Foreign Exchange Earner. Presenters for The Private Sector and Becoming a leading Agro-Industrial Country by Year 2010 were unable to present summaries of their papers.
During the brainstorming session, the group realized that Tourism had been overlooked during the planning session and therefore included it as a subject area to be discussed and for which recommendations were made.
Mrs. Villars presented the recommendations and actions to the participants.
Recommendations
The Private Sector • Create an enabling environment Improve the processes within Government Institutions that impact on time and transaction costs • Set time limits for processes .. NED, May 14-15, ZOOI 35 ... ______t __OWU;""[""'~ ______
• Customer to levy penalty on institutions for non- performance (GSL, GSBV, CEPS, IRS, GAPOHA) Introduce a one stop shop for clearing of goods Consistent policy within Government Institutions Improve the macro-economy by • Review interest rates • Stabilization of exchange rates • Reduction of tax rates • Access to long term capital Simplification of land acquisition and registration process Prompt payment by government for goods and services performed by private sector Improve information flow between services providers and their beneficiaries
• Aggressively promote non-traditional exports by: Providing tax breaks I •• Encouraging producers to form cooperati ves Improving the standards of finished products Government should focus attention and resources on already \~. identified list of agricultural products to facilitate rapid growth '..., Becoming a leading Agro-Industrial Country by 2010 • Rural Banks should be re-structured to assist SMEs in the rural areas • Cocoa extension services should be extended to other agricultural sectors • Linkages in agriculture should be strengthen - production, marketing, etc. • Basic infrastructure for agriculture to be provided by government
ECOWAS and Regional Integration to • Government should collaborate with and empower the private sector playa leading role in the fast track process to promote the free ~ .. movement of goods and services and access to expanded markets
Trade Reform Liberalisation • Foster a better collaboration between manufacturers and distributorsltraders to reduce unbridled importation of foreign goods and also promote better distribution of locally manufactured goods.
Information Technology as a Foreign Exchange Earner • Government should immediately facilitate the deregulation of the telecommunications sector to encourage private sector investment in telecom infrastructure. ' .. Tourism one • Consolidate the diverse Ministry, Commissions, Boards, etc. into umbrella Ministry e.g. Tourism
NED, May 14-15,2001 36 • Create one working group within CDF (Common Development Framework) process to coordinate donors' contributions towards tourism, - ...
..
NED, May 14-15,2001 37 SYNDICATE GROUP 6
RESOURCES FOR GROWTH.
Chairperson: Mr. Amartefio
Mr. Nick Amartefio chaired the Resources for Growth syndicate. During the sessions the Ministers for Agriculture, Energy, Transport and Communications and the Deputy Minister for Transport and Communications participated heavily. It was agreed that a country with a sound agricultural base would be better enabled to grow well. However Ghana's lack of growth has been blamed on our inability to implement good suggestions. It was therefore agreed that one area, which has in, the past moved Ghana ahead, was the setting up of a mining commission for the mining sector. In the light of this most of the discussions were based on the proposal of setting up an Agricultural Commission.
Agriculture
Recommendations 1. Promote Agriculture Business to attract Commercial Farmers • Establish an Agriculture Commission • Help Small Scale Farmers • Establish Co-operatives for inputs, marketing, etc.
2. Establish Land Banks • Find innovative ways of Land Acquisition • Identify already available land • Find out status of state lands • Undertake public awareness campaign • Land Acquisition must be project driven • Encourage private sector to setup land preparation companies • 10% Equity to be put in trust towards Rural Development ....
3. Post Harvest Marketing • Support Farming co-operatives (with inputs and marketing) • Establish small scale community based Irrigation project • Rehabilitate and maintain selected Feeder Road Routes • Setup Storage facilities • Develop an inventory credit system (collateral for loan)
4. Re vitalise Ghana Food Distribution Corp • Visit other countries to review models • Take inventory of existing government facilities • GFDC to focus on specific crops • Manage food security stocks
NED, May 14-15,2001 38 • Create strategic food reserves with management and ownership under private sector.
5. Agricultural Commission to implement all above recommendations and actions • Setup Task force under Ministry of Agriculture • Task force to perform preparatory work for Agriculture Commission (including terms of reference and frame work for transition) .
Implementation • Preparatory work by the end of August 2001 • Establish Agriculture Commission by the end of December 200 1
... Infrastructure In the area of Infrastructure it was identified that there was a need to ensure that infrastructure development is linked to Agriculture particularly to promote wealth in the rural areas. There was also a need to co-ordinate infrastructure development particularly among the utilities. The discussion was classified in 2 parts -
• Rural • Urban.
., Recommendations • Co-ordination of Infrastructure Development • Establish a comprehensive planning framework • Legislation for financing infrastructure • Link infrastructure development to land use. • • Apply incentives to developing infrastructure • Ensure efficient town planning
1. Infrastructure Development in Rural Areas
• Develop a Canal (Volta Lake) - Irrigation - transport • Build Silos for storage • Build Feeder Roads • Establish organised Markets for local produce • Improve Power, Communication and water • Implement incentives for infrastructure development • Focus on infrastructure for Agricultural Development.
NED, May 14-15,2001 39 j ... ______• ______iII_~=
2. Infrastructure Development for Urban Areas
• Develop mass transport (rail, roads air) • Intra urban • Inter urban • Improve Waste management facilities • Improve roads or expand where necessary • Improve Power, Communication and water • Implement domestic air transport
"'" Mining
Mining was not part of the issues to be discussed. However it was added because the group identified that it was a critical area which could support Iooi development.
Recommendations
• Restore mining code to make it internationally competitive • Initiate consultation between government and planning stakeholders prior to decisions being taken. (Increase dialogue) and • Establish policy to deal with national security, health environmental issues of illegal mining (galamsey). • Focus on establishing Non-Mining employment in all areas
Power and Energy
1. Need for reliable power supply at economic and recoverable costs.
• The plans for generation of supply by VRA and GNPC appear to be adequate. We need to ensure that those plans are implemented fully and according to schedule. • Accelerate completion of energy plan by Energy Commission • Encourage Private Sector Participation for Competition • Accelerate development of West African Gas Pipeline.
2. Ensure full cost recovery by 2003
• Initiate public education on full cost recovery • Ensure aggressive Sales and marketing by utilities • Implement nation-wide prepaid meters
NED, May 14-15,2001 40 • Financing difference between current tariffs and cost efficient and economic tariffs for the 2 year transitional period . • Mobilisation from government through taxes . • Identify Soft Concessionary loan to deal with the difference.
3. Distribution (Distribution System should be improved.)
• Utilities must be held to be responsible for improving the quality of service as agreed with the government and PURe. ... 4. Energy utilisation • Promote efficient and productive use of energy • Promote less energy intensive industries
Petroleum
1. TOR expansion project will enable Ghana meet its petroleum requirements by year 2002. The plan will; • Make LPG more available for domestic use • Reduce deforestation • produce unleaded fuel
Other recommendations are
2. Deregulate oil marketing operations and prices by 2002
3. Encourage private sector participation in oil refming for exports.
4. GNPC to concentrate on core activity - oil exploration to shift from offshore to deep sea exploration.
NED. May 14-15.2001 41 ------.------...... ~"'--'''' ...... - .. -
COMMITMENT FROM LABOUR - TUC Sec. Gen Mr. K. Adu-Amankwah
The commitment from labour was given by Mr. Kwasi Adu Amankwah Secretary General of the Trade Union Congress. He expressed his reservations about making commitments based on several assumptions, such as government and private sector making similar commitment to upholding the objectives of the National Economic Dialogue.
Mr. Amankwah stated that labour is committed to wealth creation, so long as it would be done on the basis of justice and equitable distribution of the wealth. He was appreciative of the extent to which the TUC was involved in the planning process and intimated that the recommendations made in the areas of Poverty Reduction, Resources for Growth and Human Resources Development were good examples of the direction the TUC would like to follow. Labour would remain committed so long as other .. " partners showed commitment.
On consultation, Mr. Amankwah hoped that the process of consultation by the government of the New Patriotic Party would not be a nine-day wonder. He acknowledged that labour had been involved in the planning process, had fully participated and hoped the results would not remain on shelves of ministries.
In dealing with the issue of economic decision-making in a globalised world, Mr. Adu-Amankwah recognized that economic decision-making does not lie solely with the people of Ghana. He recognized that relations with powerful organisations like the World Bank and International Monetary Fund imposed conditionalities on Ghana. He hoped that these conditonalities would not remain a hindrance to the achievement of the objectives agreed at the National Economic Dialogue. He was of the opinion that the government should take labour into confidence when such conditionalities affect the objectives agreed upon.
Mr. Adu-Amankwah recommended occasions for periodic reviews and assessments based on mutual terms. He noted that one striking recommendation made, was the concern for the promotion of core labour standards, which he said comprised the following:
• Freedom of Association • Collective Bargaining • Non-discrimination in employment matters • Elimination of child labour, and • Disagreement with forced labour.
In the promotion of these core labour standards, he was of the opinion participation should be seen as essential and tripartism encouraged.
NED, May 14·15,2001 42 .... , that Mr. Adu-Amankwah ended the commitment of labour by stating for organised labour's existence provides an important channel .l1li consultation and needs to be supported. He urged all parties to appreciate a the value of organised labour and the support it requires in ensuring total credible partnership between labour and government and pledged the ,iii commitment of labour to wealth creation and distributive justice.
I. COMMITMENT FROM THE PRIVATE SECTOR , Presented by .. Mrs. Elizabeth Joyce Vilars Council Member of PEF Vice President (AGI) The private sector led by the Private Enterprise Foundation. AGI, GNCCI, with GEA, GAB. FAGE and other components expressed its satisfaction the process adopted for consensus building during the National Economic Dialogue and the conduct of the dialogue itself
Mrs E.J Villars also expressed satisfaction that the government had shown ... clear sense of leadership in its handling of some of the very difficult taken decisions and choices needed to be made. She stated that having was very active part in the deliberations at the dialogue, the private sector the also satisfied that the discussions have been candid and frank and that recommendations made needed to be implemented. the In view of the clear sense of determination and commitment that other private sector had seen on the part of the government and were stakeholders, she stated that the private sector had promised and indeed resolved to add their full weight and effort to ensure a successful with implementation. They were also committed to a continuous dialogue the government and the other stakeholders.
In conclusion the private sector pledged to assist in effective a implementation of the recommendations arrived at and recommended joint monitoring and evaluation process. This she said would ensure proper feedback on the implementation and would help to achieve the prioritised targets to speed Ghana towards achieving a middle income status.
NED, May 14-15.2001 43 COMMITMENT FROM THE GOVERNMENT
Minister of Finance Hon. Yaw Osafo-Marfo Revenue Generation a Top Priority
The Minister of Finance pledged the commitment of the Government of Ghana to increase the revenue generation capacity of the country and to curb national expenditure levels. This commitment stemmed from Ghana's use of a substantially large proportion of its total income to service sovereign debt (domestic and external) and to make statutory payments particularly on wages and salaries. The Minister outlined the following plan of action.
Action Plan for Resource Mobilisation
Exemptions • Exemption of all NGOs to be abolished with exception of educational projects. • Leakages in revenue collection agencies to be minimised (CEPSI IRS) with the help of the private sector. • Increase efficiency in management of the above agencies. • Support the Justice department in setting up tax courts.
Assistance from Ghanaians Living Abroad The Minister suggested three main ways by which Ghanaians residing outside could contribute to mobilising resources for the development. These are: • Voluntary contributions to an established fund through the banking system • Contributions and assistance linked to an identifiable project • The floatation of zero-rated bonds
The Department of National Lotteries The Minister revealed that current contributions to national revenue from lotteries is 0.7% as compared to 10% - 15% in 1969 - 1974. He revealed the following plan: • Ensure efficient system of lotteries operator registration and management in order to optimise the revenue potential. • The appointment of a Games Commissioner to regulate lotto operations by end of the year.
Pension Schemes • Encourage competition in pension schemes through liberalisation of the industry.
Loan Recovery The Minister announced that a total of ¢ 4.8 trillion is in arrears. He stated that the grace period is over as demand letters had already been sent out. 'Co",
NED, May 14-15,2001 44 He stressed on Government's determination to ensure that revenue due to the State is collected.
Labour and Wages • High levels of inflation and interest rates negatively affect increases in real wages. Government will ensure that inflation is controlled and minimised. The result of this action will be to ease access to funds for private sector development. • BoG, IMP and MoF are in talks as part of efforts to reduce domestic debt . ..
NED. May 14-15.2001 45 IMPLEMENTATION AND FOLLOW -UP MECHANISMS AND PROCESSES
Comments from Participants A participant recommended that a committee be set up to implement the recommendations, while another recommended the use of financial experts for revenue projections and target setting at the District level. ... The recommendation on the setting up of a technical committee was then refined, In addition, a chairman of one of the syndicate groups recommended that a high-powered representative group should be set up, to which any technical committee would report to ensure collective commitment. Membership of this group should come from labour, the private sector and government, other political parties and civil society. This body should oversee the balance between wealth creation and distributive justice, and to make commitments on what is 'doable', in the ..... areas of wealth creation and poverty reduction.
Further recommendations on implementation centred on exploring the possibility of large scale financing for projects through the stock exchange, and other avenues.
ili~ To ensure proper implementation, a participant recommended the use of Ghanaian research centres. He reaffirmed the need for implementers to seriously consider and promote the things in Ghana instead of seeking i~ outside assistance. He further encouraged implementers to think about other sources of energy such as solar & wind energy, which are much better and healthier.
On the structure of the technical committee, a participant recommended that it should neither be placed under the civil service or modeled on its setup. Instead, it should work under the secretariat of the Private Enterprise Foundation, which is an umbrella organisation with members from various fields. Information on reports of earlier seminars and workshops should be made available and decisions involving restructuring, efficiency etc. which would not involve much cash outlay should be put on the fast track within an appropriate time frame.
On the issue of monitoring, the minority pledged to do its job of monitoring, especially at the parliamentary level. The representative of the minority was of the view that some of the targets had not yet been quantified and that is an area that needs to be addressed, in terms of inflation and macro-economic indicators and time frame within which they would be achieved.
The technical committee is expected to attach responsibilities to Ministries, Departments and Agencies and should delineate responsibilities of various parties for various aspects as well as
NED, May 14-15,2001 46 .... the dissemination of the infonnation from various stakeholders to enhance prospects for the achievement of the recommendations.
Sec. Gen, Tue The roc Secretary General agreed with the idea of setting up a committee and and recommended that it should be made up of the rapporteurs resource persons who would put together the report. They are to indicate where the different responsibilities lie and should report to a more body representative body. which would monitor the implementation. This the should include representatives and institutions that would have as responsibility for implementing various aspects of the recommendations well as representatives of business. labour and civil society.
The task of this body would be to oversee the report and adopt it on behalf the of the National Economic Dialogue. The coordination of implementation should be the responsibility of the Ministry of Economic Planning and Regional Cooperation and the standing tripartite committee.
He further recommended that the body meet quarterly and shOUld the undertake an annual evaluation to find out the extent to which the recommendations have been implemented and amendments made to recommendations if the need arises.
for Finance Minister of The Finance minister stated the need to consider the regular flow He government expenditure. He intimated that this was of concern to all. stated that a committee made up of the Governor of the Bank of Ghana. the Control1er and Accountant General and the Director of Budget would He meet weekly to assess the inflow of revenue vis-ii-vis expenditure. is underlined the need to avoid borrowing to create the same problem that with currently faced by the government. In order to match inflows as expenditure. programmes of some ministries would be delayed as long he the inflows are not enough. He asked for understanding while implements this. had With respect to the debt of parastatals. he announced that work these commenced on the process of collecting the actual figures owed by parastatals. This data is required for discussions with specific bilateral audit donors and lenders in Paris in July. The World Bank is assisting to some of these institutions. He stated that work is on-going in specific of institutions like Tema Oil Refinery, GNPC. and VRA to assess the size their debts. the He also expressed the concern of cabinet about the delivery capacity of lot of civil service as it stands today. The civil service. he said. requires a capacity building, retraining and redressing to deliver, and there would that need to be some level of reorientation and retraining. He intimated some donor partners had agreed to offer their assistance to this effect.
NED. May 14-15.2001 47 On the issue of labour, salaries and wages, he was of the opinion that it was not properly tied in to productivity. He further stated that during negotiations anywhere in the world, it was the last balance sheet that was the basic document at such negotiations. There was therefore the need to create and share. He reminded participants that the year 2000 figures for the economy showed the level of imports from Ghana had dropped by 20%, showing a lack of productivity. He was of the opinion that in such instances, management must bear the blame. Therefore in negotiating any wages and salaries, the issue of productivity must be paramount. He concluded by stating that productivity was paramount in achieving targets. The target for year 2001 was to have an end of year figure of 25% on inflation and he believed they were on target in achieving this.
NED, May 14-15,2001 48
...,il Summation of comments by the Chainnan On the basis of the various presentations made, the chainnan for the occasion summed up recommendations from the floor. - He stated that recommendations had been made for the setting up of a technical committee essentially made up of the resource persons, chair persons, the rapporteurs, technical persons from the ministries who have been involved in the Dialogue to distill all the infonnation brought up and synthesize them for internal consistency.
... The committee should then map out what can be done as well as the kind of targets to go with the various recommendations.
He stated that implementation; coordination; and monitoring were of crucial importance. He added that three basic elements of the recommendations, that is, policies, programmes and projects, show that "'" the implementation cannot be assigned to the ministries alone. The ministries are not supposed to implement; they are supposed to have primary responsibility for policy fonnulation. The ministries are therefore to take up those recommendations requiring policy decisions. There are departments, agencies and parastatals under the responsibility of these sector ministries and they would be responsible for some aspects of the implementation as they are implementing organs of the ministries.
He also identified the private sector as another group that would have to be responsible for implementation as a lot of the recommendations would need to be implemented by them. He included labour, the NGOs and District as being actors to oversee implementation.
On the issue of monitoring he was of the opinion that it is not necessary to set up a new agency for monitoring. MEPRC had responsibility for monitoring some of the targets that had been set. Within that context, the oversight committee needed to have broader representation from all the stakeholders. MEPRC should have responsibility for the coordination of the implementation of the various agencies while the oversight committee should be responsible for monitoring response in respect of the targets. He stated that the oversight committee may have a secretariat with responsibility for monitoring on the basis of output indicators and benchmarks.
Response by Hon. Dr. Nduom The minister responded to the summary by referring to matters of process and principle. He referred to the speech of the president the previous day, and reminded participants that there was commitment to stakeholder participation in reviewing the outcome of the dialogue and in monitoring the implementation and recommendations. He referred to a fonn of shortened annual general meeting of Corporate Ghana to infonn
NED, May 14-15,2001 49 ------_._._'------...... ,--_ ... _------
I"" participants of how well implementation was going. He reminded participants that there were recommendations in all manner of forms, necessitating the need for a group to meet shortly to put everything together to achieve internal consistency, confirm targets and assign responsibility, all of which will be done to refine the document and make it available to everyone countrywide. iW.
On the district assemblies, he was of the opinion that they would have to play a role in the implementation, and stated further that it will be "'. necessary to get the publicity to that level so that they know the role being assigned to them. ... He pointed out the role labour, the private sector and civil society had played in the dialogue. He stated that government is taking its role to lead very seriously and accepts responsibility to ensure that the recommendations get implemented. He reiterated that government machinery will be used to ensure the recommendations get implemented with strong partnership with all the stakeholders that exist in the Ghanaian .'" economy.
I...
NED, May 14-15,2001 50 ... Closing Statement: H. E. The Vice President His Excellency the vice president acknowledged the presence of all dignitaries and other invited guest to the National Economic Dialogue. He stated that all too soon the well intentioned and planned National .... Economic Dialogue had come to a close. He described the event as historic and of immense significance to the future of the country.
He stated that in essence, the process, from the preparatory workshops to the conclusion of National Economic Dialogue, was essentially to diagnose the economic ailments of the country and collectively prescribe solutions. He noted that it had been an enormous task well shouldered and delivered, and on behalf of government and the people of Ghana, His Excellency thanked the planning committee, the workshop organizers, facilitators, resource persons and participants, for the good work done. He also thanked representatives of civil society, labour, the private sector, and the development partners, as well as all those who contributed in diverse ways to make the dialogue a success.
He highlighted the President's vision for the country and placed particular emphasis on the theme the Golden Age of Business because it was very relevant to the overall scope of activities of the nation. By this, the president meant that labour, private sector, civil society and government should work together as corporate Ghana with a shared common vision that will allow all to win.
He noted that throughout the event participants managed to pull together and accept collective responsibility for resolving their own problems. He emphasized the government's determination to solve the debt crisis, bring about fiscal discipline and protect wages, savings and pensions of the people by defeating inflation. He stated that government had resolved to provide the required leadership to solve our economic and social problems.
He noted that participants had made several key recommendations that the government should focus on. The few he mentioned included
1. Social relief should be given to the five regions; Northern, Upper East, Upper West, Eastern and Central Region to eliminate extreme poverty and enable the people to engage in productive activities . • 2. Government should manage the fiscal situation well to reduce government borrowing from the domestic market 3. The creation of an Agricultural Commission to harness the efforts of government, improve policy and encourage significant investment in agriculture.
NED, May 14-15,2001 51 ••
... MASTER INVITATION LIST
For the
NATIONAL ECONOMIC DIALOGUE
... Accra, Ghana
MAY 14 -15, 2001
,..
Iii
ilil
III Master Invitation List for the National Economic Dialogue May 14 & 15, 2001 Prefix Arst Name Last""'" MRS. JUSTINA R AAHIPA GHAAA INSTITUTE OF Pl.ANNERS ...... ,., MR. JOHN ABABJO C'ODATABANK - MRS. VICTORIA ABANKWA WORlD FOOD PROGRAMME """"'" MR. CLEMENT G. ABAVAHA RESPRO DR. J.LS. ABBEY DIRECTOR CENTRE FOR PCUCY ANALYSlS(CEPA} - MR. CHARLES ABBEY EXECUTIVE DIRECTOR ADP (C/OGAPVOO) - MRS. MAIORIE ABDiN GIWiA FED. OF BUSINESS & PROF. ~£N -...... MR. KWASI ABEASI DiRECTOR-GENERAl (e) PAlVATE ENTERPRISE FOLO Master Invitation List for the National Economic Dialogue May 14 & 15, 2001 \oj. Prefix First Name last Name Position Institutional Affiliation Syndicate MA. Justice AMEGASHIE Resources Ms. DZISA AMEGASHIE (R) SOC CONSUL nNG S SALOOE AMEGAVIE EXECUTIVE SECRETARY GHANA NATIO!IIAL CHAMBER OF COMMERCE Financial .. " MR John AMEKAH GENERAL SECRETARY GCPP Resources MR. RUDOLF AMENGA ~ ETEGO INTEGRATED SOCIAL AND DEVELOPMENT CENTRE Poverty MR. K. AM1SSAH·ARTHUR INDEPENDENT CONSULTANT Economic YEBOA AMOA MANAGING DIRECTOR GHANA STOCK EXCHANGE Financial ". K.N. AMOAH CORPORATE PLANNING GHANA NATIONAL PETROLEUM CORPORAnON Economic OR. S. A. AMOAH ASSO. DIR. GENERAL GlMPA Poverty OR. WEREKO AMPEM II CHAIRMAN BARCLAYS BANK GHANA LTD. Financial MR. ATO AMPIAH PRESIDENT GHANA EMPLOYERS ASSOCIATIO!II Poverty MA. KWAME AMPOFO RESDEM CONSULTING LTO Poverty MA. MUHAMMED AMUOA 1001 MIN. OF COMMUNICATION AND TRANSPORTATION. PPME Poverty MRS. WINNE AMUGI VICE·CHAIR TRADES UNION CONGRESS Poverty MR. ClETUS AMUZU·ADDO WORLD VISION GHANA Poverty MR. JAMES ANAMAN PRESIDENT GHANA CHAMBER OF MINES Financial W. R. ANANE PARLIAMENT SUB-COMMITTEE Poverty MRS. ROSE KARIKARI ANANG EXECUTIVE DIRECTOR GHANA EMPLOYERS ASSOCIATION Educ &Labour MR. T. E. ANIM MANAGING DIRECTOR CITY SAVINGS AND CREDIT BANK Financial MR. SAM ANING (R) BOC CONSULTING S MR. AlEXIS F. K. ANNING AFTECH LIMITED Financial ANNORBAH-$ARPEI CENTRE FOR COMMUNITY STUDIES, ACTION DEVT Poverty MR. TOM ANSAH EXECUTIVE SECRETARY ENERGY COMMISSION Financial ..i/ MR. FRANKliN ANSAH·ANTWI (R) BOC CONSULTING S D.A. ANTWI GENERAL SECRETARY TEACHERS' AND EDUCATIONAL WORKERS UNION Educ &labour MR. AOU ANTWI SECURITIES REGULATORY COMMISSION Financial M.A. ANTWI Resources 1.1. ANYA AG. GENERAL MANAGER UNIPETROI. GHANA LTD Economic MR. FRED APALOO MANAGING DIRECTOR COH Business PROF. S.K. APEA INSnTUTE OF ECONOMIC AFFAIRS (lEA) Financial MRS. ESTER APEWOKIN NATIONAl POPULATION COUNCIL Poverty PROF. GEORGE APPENTENG EXECUTIVE DIRECTOR INSTITUTE OF ECONOMIC AFFAIRS (lEA) Economic MR. KWABENA APPENTENG TRADE, AGRICULTURE AND F USAIDfGHANA Poverty MR. AlFRED KOFI APPIAH PROGRAM MANAGER GHANA NATIONAL EDUCATIONAL CAMPAIGN (cfoGAPFOD) Poverty MR. A APPIAH·MENKA MANAGING DIRECTOR APPIAH MENKA COMPLEX Business HON. K. APRAKU MINISTER MINISTRY OF TRADE & INDUSTRY Economic Ms. FRIMPQMM ARHIN (R) SOC CONSULTING S PROF. B ARMAH SENIOR ECONOMIST (P) INSTITUTE OF ECONOMIC AFFAIRS (lEA) Business MR. ADU ARTHUR PEEWOODLTO Financial PROF. ERNEST ARYEETEY (P) ISSER Economic MA. ABUBAKAR ARYEETEY FEDERATION OF MUSLIM COUNCILS Poverty HON. M. ASAGA M.P. PARLIAMENT Economic Mr. Stephen Asamoa Boateng Special Advisor OffICe of the President S E. F. ASAMOAH MINISTRY OF FINANCE, VAT SERVICES Poverty MR. KOfl ASAMOAH Poverty J.A ASAMOAH DEPUTY DIRECTOR GHANA COCOA BOARD (COCOBOD) Resources MR K.B. ASANTE INDEPENDENT CONSULTANT Business MR. S. K. 8. ASANTE CHAIRMAN PUBLIC UTILITIES REGULATORY COMMISSION Financial ... DR. EDWARD ASANTE GIMPA Poverty MR. KOFI ASANTI-FRIMPONG NATIONAL POVERTY REDUCTION PROG. (NPRP) Poverty NANA YESOAH KOmE ASARE II PRESIDENT PRIVATE ENTERPRISE FOUNDATION (PEF) Poverty MR. CHARLES ASEMBRI DIRECTOR-GENERAL SECURITIES REGULATORY COMMISSION Economic MR. ISHMAEL ASHITEY MINISTER FISHERIES Poverty DR. S ASHONG RESEARCH FEllOW (P) CENTRE FOR POLICY ANALYSIS (CEPA) Economic SELSI ASHONQ-KATAI EXECUTIVE DIRECTOR INSURANCE CONSULTANCIES INTERNATIONAL LTD. Poverty MR. E. AS1EOU-NYARKO LABOUR DEPARTMENT Educ &Labour 0'" Prof. PAUL ASIMENU MINISTRY OF FINANCE Economic HON. GLADYS ASMAH MINISTER MINISTRY OF WOMEN'S' AFFAIRS Poverty B.Y. A-$OMMO MARKEnNG MANAGER FEDERAL EXPRESS Economic PROF. K. ASSENSO OKYERE DIRECTOR ISSER Economic MR. KWAKU AWOTWI ASH ANTI GOLDFIELDS LTD Poverty MR. M. A·YEBOAH CHEMICOLTD Economic PROF. A AYENSU DE? DIR. GENERAL (P) CSIR Economic MRS. DIANA AYETTERY NAT!ONAL COUNCIL OF WOMEN AND DEVELOPMENT (NCW Economic Mr. ERIC AZITENYA Educ &Labour MR. ANTHONY Y. BAAH TRADES UNION CONGRESS Economic PROF. A. BAAH·NUAKOH DEPT. HEAD ECONOMICS UNIVERS!TY OF GHANA Poverty MRS. STEPHANIE BAETA·ANSAH MANAGING DIRECTOR HOME FINANCE COMPANY Financial Mr. RAMI BAITIE (sp?) Educ &Labour MR. SIN BALASLEV COUNSEllOR ROYAL DANISH EMBASSY Protocol 2 •• Master Invitation List for the National Economic Dialogue May 14 & 15, 2001 pm;, First Name Last Name P...... lnstitutional AffiIiItkIn MR ASOOA BANDA CHAJRMAN ANTRAKGAOUP M,. Occy ..neful -- I. HON. CECIUA BAHNERliAH MINISTER MINISTRY OF MANPOHER OEVB.OPMENT & EJlPLOYJJiENT -""""Eeb:: ~ MR GIONPlQNO BARBISm -... MA. Sa 4 ~1i;I .J!:.'/ Master Invitation List for the National Economic Dialogue May 14 & 15, 2001 Inltltutionll AfftUIIion Prefix Fhst Name Last Name Position ". CPP FlAGBEARER """" FlAGBEARER NDC -"""" ... FLAGBEARER PNC. CANADIAN INTERNATIONAl OEVaOPU.ENT IIJa¥:)( """" MR. ROBERT FOOTE BOG MEDICAl DEPARTMENT B. FORSON HEAD --~ DaQITTE & TOUCHE MR. JOSEPHK. FORSON EMBASSy OFlHE UNITED STATES """" l T. COL NANCY FORTUIN NDU NOPC MR K.AOEJI FOS" - BOWJERS ADVlSOAS """"-... MR. REGGIE FRANCE PAR1NER BEYOOD AID (00 GAPVOD) MS. ANGElA GADZEDPO EXECUTIVE DIRECTOR DATA BmK LTD. """"B 6 Master Invitation List for the National Economic Dialogue May 14 & 15, 2001 Prefix Flrst Name LastNa ... Position MR. J.ATTA NYAMEKYE MANAGING DIRECTOR INKULENU INDUSTRIES LTO MR. KWAME NYANTEKYI MANAGING DIRECTOR INTER AFRIQUE GROUP -- MR. VICTOR NYAHTEHG {PI ISSER -- S.W. O-AGYAKWA COMMnTEE Of VICE-CHANCEI.lORS -- Mr. P.V. Oben. --"""'" MFt Y OBENG AGAlMATLTD MR. Jake OBETSEBI-LAMPTEY MinislerfOt Presidential ~ & Chief of Staff -"""'" I.A. OBOH GENERAl SECRETARY RAILWAY ENGINEERS tROClN """'"EW:.,...... MRS. ESlHER OCLOO MANAGING DIRECTOR NKULENU INDUSTRIES LTO MR. KOFI OC"'" MINISTRY OF ANANCE """'"EW:.,...... E.C. 0001 MINISTRY OF ENERGY MINISTRY OF ENERGY DR ABENA OOURO (PI CENTRE FOR PCUCY ANAl.. YSIS (CEPA) """'" FRANCIS OFORI DIRECTOR, CROPS SEA. MINISTRY OF FOOD & AGRiCtAJURE F...... A.K. OFORI-AHENKORAH EXECUTIVE DIRECTOR ENERGY FOUNDATl()\I -- MR. KEN OFORI-ATTA DATABANK LTD. """'" MR G.K. orosu NOPe ....,.,.. D.P. OFOSUK DIRECTOR MINISTRY OF DEFENSE - K. OFO$U-ADARKWA MIN. FOR PRIVATE SECTOR OEVElCf>loelT """'" MS. Esther Ofos"'peI SlgnaOno""""""'" s Mr. Alex Ofusu T.V. 3 -- PROF. FRED OHENE AKUFfO KNUST. MECHANICAl ENGINEefQNG OEPARDlENT KA OHENEMANU MANAGING DIRECTOR OYSTER HEAln!CARE LTD. -"""'" ... J. A. OLLENNU GATFNAY SECRETARIAT """'" K O-IIE.NSA.H NATIONAl. COMMLtOCATIONS Al1THORIlY NASAESHI ONO JAPAN lNTERNATIONAl. COOPERA'TlCW N3ENCY - G. OPOKU GATEWAY SECRETARIAT -""""" NANA OPOKU MANAGING OIRECTOR GOLD COAST SECUAmES LTO. MRS. JANET OPOKU-ACHEAllPONG AG. COMMISSIONER IRS - Mr. Sw. OPOKU-AGYAKWA --EW:&t-. E. OSAE CAEG, KWABENYA -- RAYMOND OSAFO-DJAM OCE K_Soutt> HON. Y. OSAfO.llAFO MINISTER MINISTRY OF ANANCE -"""'" DA. AAKOTO OSEI ADVlSCR MINISTRY OF FINANCE """'" MA. KWBENA OSEJ-SONSU COOROINATOR IL()(JFA PRESA """'" .... MR. EMMANUEl OSEJ-KUIIAH DEPUTY GOVERNOR BANK OF GHANA """'" MRS. PEGGY Oll-BOATENG KNUST, T. C. C, MR MICHM.. OWEN ECONOMIC~OR EMBASSYOFTHEUNITEOSTATES -- OHENEBA OWUS·DAHSO GtWlA MEDICAl.. ASSOCIA TJON. -""""" MR. A. A. OWUSU MANAGING DIRECTOR ASTEK (GH) LTD """'" MR. HARRY OWUSU PRIVATE EN1EAP~ FOlRiOATlOO (PEF) HON. F.K. OWUSU-ADJAPOHG MINISTER MINISTER OF TRANSPORT & COWJl.NCATlOO -- MFt P PEPERA MANAGING DIRECTOR PHCMOTORS -- MR. KWAME PlANlM NEW WORlD INVESTMENTS -- G. PRADEEP -- PRESIDENT BRONG AHAFO t-K>USE Of OiIEFS -- PRESlDENT CENTRAL REGOO HOUSE Of CHIEFS --"""'" PRESIDENT GHANA LNIOO TRADERS ASSOC. """'" PRESIDENT NA11OOAI... HOUSE OF CHIEFS """'" MRS. LUCIA QUACEY PRESIDENT GHANAASSOCIATICN Of WOMEN ENTREPRENURES """'" MR. KClBINA QUANSAH MANAGING DIRECTOR BARClAYS BmI< GI-WlA LTD. """'" T QUAHSAH GTS MA. EBOW QUAR$HtE PRESIDENT GHANA BAR ASSOClAl1DN -"""'" AS'" QUARlFf VICE·PRESIDENT GHANA NAllOOAl Qt.W.SER OF COWlERCE MR. FRANCIS Q... ".,. CEO INTERCOM OATANETWORK -"""'" AUGUSTINE OUASHIGAH PRESIDENT GAOOTSINT """'" HON. COURAGE QUASHIGAH MINISTER MINISTRY Of F{X)[) & AGRIClt. TURE -, H.Y. QUAYE PUSUC SEIMCE WOO ofthe Preparatory Workshops held between April 19 and May 7, 2001 ... for the National Economic Dialogue lil' ... Introduction to the Preparatory Workshops for the National Economic Dialogue held at GIMPA The Preparatory Workshops towards the National Economic Dialogue th th were began on the 19 of April and ended on the 7 of May 2001. The workshops Regional organised in collaboration with the Ministry of Economic Planning and workshops was to Integration, USAID and Sigma One Corporation. The objective of the develop a strategic direction for the upcoming National Economic Dialogue. from Ghanaian About 600 participants who represented a broad spectrum of stakeholders workshop. civil society, government and non-government institutions attended the The broad themes for the six workshops were as follows }> Poverty Reduction Strategy }> Golden Age of Business }> Education, Labor Market and Human Resource Development }> Resources for Growth ... }> Economic Policy }> Financial Sector Dr. Apraku Keynote addresses were made by Dr. Kwesi Ndoum (Min. NEPRl), Hon. workshop to (Min. MOTl), and Mr Adu Amankwah (TUC) at the convener of each dispersed into introduce the focus of the work group discussions. The participants then of the workshop. groups of their choice to discuss specific topics relating to the theme (see Selected professionals presented papers on the various topics to be discussed The workgroups ... appendix), which formed the background of the workgroup discussions. using that as a then identified and discussed opportunities in relation to the topic, and were then backdrop identified key issues critical to the area of focus. Recommendations made to address the critical issues identified. with The groups at the end of their sessions presented prioritized recommendations debated at the corresponding action plans. Each workgroup'S recommendations were . plenary session of the day in order to arri ve at a meaningful consensus .. in this document, were to form the basis of The recommendations, which are summarized and 15,2001. discussion at the upcoming National Economic Dialogue on May 14 Workshop 1 - Poverty Reduction Strategy, April 19, 2001 Macro Economy - Paper by Dr. S. Ashong (CEPA) Human Resource Development and Basic Services - Paper by Dr. KU1Ifa Vulnerability and Exclusion - Paper by Dr Akwertey Production and Gainful Employment - Paper by Mrs Abena Oduro Governance - Paper by Dr Sulley Gariba .' Workshop 2 - Golden Age of Business, April 23, 2001 The private sector - Paper by Mona Caeser-Addo Becoming a leading agro-industrial country by the year 2010 - Paper by Dr. E.O. Asante Ecowas and Regional Integration - Paper by Dr. D. Zonnelo Trade Reform Liberalization - Paper by Prof. Bartholomew Annah (lEA) Workshop 3 - Education, Labour Market & Human Resource Development, May 2, 2001 Financing Education in Ghana - Paper by Prof. Djangmah (lEA) Labour Market and Human Resource Development - Dr. Kwabia Boateng (LEGON) Health Care Financing - Paper by Mr. Daniel Mensah (Metropolitan Insurance) Workshop 4 - Resources For Growth, May 3, 2001 Agriculture and Food Sector - Paper by Dr. Nyanteng Sustainable Energy for Growth Infrastructure and Economic Growth - Paper by Grant Kesse Workshop 5 - Economic Policies, May 4, 2001 The State of The Ghanaian Economy (A Macroeconomic Perspective) - Paper by Dr. S. Ashong. (CEPA) Fiscal Discipline in Ghana - Paper by Dr. George Apenteng (lEA) Macro-economic Stabilization - Paper by Dr. Gockel Environment, Science & Technology - Prof. Akwasi Ayensu (Deputy Director-General CSIR). Workshop 6 - Financial Sector, May 7, 2001 Ghana- The Leading Financial Centre In West Africa - Paper by N.K. Opoku Long Term Capital for Growth - Paper by Mr. Sam Mensah Domestic Debt Management - Paper by Dr. Nii K. Sowa, CEPA, Accra RIPC - Paper by Prof. Kwadwo Asenso-Okyere (Vir. ISSER) '" ..... ,- WorkShop 1: Poverty Reduction Strategy, April 19, 2001 Dr. P. Kwesi Nduom ... (Minister for Econ. Planning and Reg. Cooperation) The Minister set the tone for the workshop by stressing that the National Economic Dialogue will set a national agenda and targets for the economy to guide government, the private sector, labour, civic society and other stakeholders. He highlighted the other workshops to be held before the National dialogue and stressed that these workshops were structured to gain the participation and consensus from a broad cross-section of the Ghanaian populace in the development of a Ghana Poverty Reduction Strategy. Dr. Nduom reiterated that the Government Poverty reduction strategy is as important as it will determine the development assistance program between Ghana and it development partners. It will also - determine how any relief gained from the RIPC initiative is spent. This workshop he declared is a consensus-building one. However, he pointed out that issues arrive at are still open for debate and are going to be passed on as recommendations for the National Economic Dialogue. Situation Analysis of Ghana Dr. George Laryea Adjei (Convener) Dr. George Laryea Adjei delivered the Poverty Situation Analysis Report on Ghana He described poverty as a situation of unfulfilled rights and entitlements and it is characterized by a slow pace of creating opportunities for asset creation, slow pace of sustaining human development and a wide socio-economic and geographical disparities. Using three criteria of; poverty from an income / consumption perspective' poverty from the perspective of social development and poverty from the perspective of participatory/social assessments, he concluded that approximately 40% of Ghanaians are poor and 27% of this population falls wI within the extremely poor group. He also noted that there is an observation of a general decrease of extreme poverty in the 1990s. However, he indicated that population growth during the period far outstrips poverty decline rates. Five of the 10 regions in Ghana have more than 40% of their population living in poverty and the worst affected are the 3 Northern regions. For example 9 out 10 people in the Upper East Region are considered poor. Dr. Laryea Adjel pointed out that poverty is highest by far among food crop farmers. He blamed factors like increasing population, poor macro-economic performance, high debt burden, near subsistence of agriculture, and unfavourable social sector spending as some of the factors responsible for poverty in Ghana. Dr. Laryea-Adjei put forward an agenda for poverty reduction which included the need to strengthen development planning by making it more - proactive, the need to promote more effective and accountable leadership in Government and the need for a better monitoring and evaluation system for the development process. DISCUSSION GROUP I Macroeconomy Paper by Dr. S. Ashong The group arrived at a consensus that redistribution of wealth alone cannot be relied upon to alleviate the plight of the poor and that economic growth is a prerequisite for poverty reduction. Members also agreed that for growth to be pro-poor therefore it must necessarily involve the participation of the less advantaged in the society. The group also held the view that macro-economic instability and policy inconsistency during much of the 1990s contributed to Ghana's failure to .... achieve higher and sustained economic growth rates. Past expansionary fiscal policies and continued high interest rates have led to a high burden of domestic debt that remains a major obstacle to private sector led growth-indeed to the development of a strong and productive private sector. The Macro-economy group therefore agreed that a macro-economic framework that catalyses the process for poverty reduction is one that fosters the creation of wealth through sustained and accelerated growth. Specifically, the macro-economy programme must be able to restore and maintain a stable and predictable macro-economic environment and address the persistent and entrenched Government Budgetary imbalances. To be able to achieve this the group recommends the following actions that Government needs to consider Recommendations and Action Plans Summarised below are the key goals and corresponding action plans that resulted from the workshop discussion. 1. Make Public Expenditure more productive ... • Re-examine decentralisation process to effect the productivity of public expenditure • Use District Assemblies' Common Fund as investments to yield dividends 2. Government policies must focus on wealth creation • Increase social expenditure and target it at addressing problems of the poor ..... Workshop 1 Poverty April 19,2001 2 ,... u, . ------ • Proceeds from divestiture and aid grants must be used to reduce 'Iil public debt and not be treated as nonnal revenues • Tax laws must be enforced to improve collection 3. Government expenditures must be consistent with the overall objectives ofthe macro economy • Reduce growth in government expenditure in relation to GDP DISCUSSION GROUP II Human Resource Development And Basic Services Paper by Dr. Kunfa This group concluded that, to add value to the individual and make himlher economically viable and marketable and therefore capable of staying out of poverty, some ingredients are fundamental. They identified such basic services as education, health care, potable water and sanitation, transport, and energy among others. They also agreed that poverty is about gaining access to consumption of these "social wages" and to the poor these services fonn a web of depri vations. The resultant effect of this therefore is that the poor often feel powerless that and trapped in the web of deprivations. Thus, to fonnulate strategies not will improve the lot of the poor, these fundamental ingredients should only be provided but, the concerns of the poor in the provision of these services must be taken into account. Five key areas were therefore elected for critical attention in order to and alleviate the plight of the poor. These were Education, Health, Water Sanitation, Feeder Roads and Energy sector. Reconunendations and '., Action Plans Education 1. Increase and bridge access gaps in the educational system • Construct and rehabi litate more schools in the Northern Region, at targeted rural and urban areas • Review and implement District Boarding Policy • Hostels for Girls in rural districts secondary schools 2. Enhance quality education by accelerating quality Improvement in public and private schools • Provide adequate textbooks for all basic schools • Improve curriculum to be practical and relevant to entrepreneurship and training • Invest more in technical and vocational education • Strengthen infonnal and civil society interventions in basic education 3 2001 Workshop 1 Poverty April 19. ",1 • Increase wages of teachers to moti vate and retain them Health 3. Emphasize interventions on major diseases that affect the poor e.g. MY, AIDS,Malaria,TB, and STDs • Enhance deficiencies through decentralization of health policies in order to remove inefficiencies and bureaucracy • Increase wages and conditions of service of health workers to moti vate and retain them. Water and Sanitation 4. Revamp and decentralize water delivery agencies to increase production management and service provision for peri-urban and rural communities • Strengthening mechanisms for integrated planning and coordination with food security, health, water and sanitation and education programs. Feeder Roads 5. Use more labour intensive and community labour approaches for construction and especially for Rehabilitation, Operation and Maintenance offeeder roads. This will ensure timely maintenance and at the same time help in employing labour 6. Apply more indigenous materials in construction and maintenance. This could also generate employment and reduce input cost. Energy 7. Increase access to sustainable energy sources etc., Biomass, Solar, and wind energy .... ". Workshop 1 Poverty April 19, 2001 4 J C DISCUSSION GROUP III "'" Vulnerability And Exclusion Paper by Dr. Akwertey People who are described as Vulnerable and Excluded also belong to the .' extreme poverty category. They constitute about 27% of the total population. They can be identified mostly in the 3 Northern regions, the Central and the Eastern regions. They are mainly food crop farmers, children in difficult circumstance like street children, single mothers, displaced communities, and the elderly folk without families. These individuals are plagued with problems like, malnutrition, lack of other economic activities, limited technical and vocational training" inadequate supplementary feeding programmes, large family sizes stigmatisation and discrimination as in the case of HIV I AIDS patients. Some of the factors leading to this phenomenon are gaps in development policies that lead to inequities, harmful traditional practices, distortions and slow pace of implementation of decentralization, lack of policies targeted at the poor in health, agriculture and education as well as bad governance. The group also identified some existing enabling factors that could be applied to resolving the concerns of the vulnerable and excluded. These include the decentralization process, civil society organizations the legal framework as well as improved communication channels. The workgroup therefore advocated that the vulnerable in the society must be carefully targeted and the following recommendations should be applied fully to address their needs. Recommendation and Action Plans 1. Ensure economic empowerment of the Vulnerable and Excluded. • The empowerment programmes should be able to build their capacity and confidence of the V and E, and must be able to instill attitudinal change in the General public that will create awareness and expand opportunities for employment to the Vand E. • Provide basic services like education, health, water, clothing and shelter for the Vulnerable and Excluded. • Enforce Protection rights to curtail discrimination and marginalisation • Take measures to prevent and effectively manage natural and man-made disasters Workshop 1 Poverty April 19, 2001 5 • DISCUSSION GROUP IV Production And Gainful Employment Mrs. A. Oduro The group identified some of the fundamental problems facing the development of Agriculture in the country. These include; credit, soil fertility, land tenure system, traditional farming systems, illiteracy and product and input marketing. It believes that Government policies must be directed at resolving these problems to create an enabling environment for increase productivity in Agriculture and to ensure gainful employment in the sector. The group believes that the use of the produce approach to identify the agricultural commodity for promotion at the district level should be adopted. By this strategy, the agricultural produce with the highest demand and marketability in a particular district should be given careful attention. Production targets could then be set at both the district and national levels. A suitable production system is also of paramount importance. This· production system could be the out grower's scheme, the nucleus or the block farming systems. Recommendations 1. Increase Agricultural yields on an environmentally sustainable basis 2. Improve upon Market access(InputIOutput) by improving the quality of access roads in addition to timely availability ofinputs at reasonable prices. 3. Promote Agro-processing to serve as ready market for agricultural produce 4. Improve productivity in the industrial and service sectors 5. Productive use of energy by the poor is to be encouraged to add value to local produce and to increase productivity and shelf life - Workshop 1 Poverty April 19, 2001 6 to ... DISCUSSION GROUP V Poverty and Governance .. Dr. Sulley Gariba The group started with an operational definition of the problem. They defined poverty-targeted governance to mean governance that is structured to ensure efficient and decentralized management of public affairs and to empower people to participate in, and influence the process of wealth creation and poverty reduction They identified some key issues confronting governance that hinder its efforts at addressing the concerns of the poor. These include the lack of • political commitment to addressing the problems of the poor and inadequate public participation in resource allocation and management. Recommendations 1. Ensure higher political commitment towards poverty alleviation • Establish strong leadership for wealth creation and poverty alleviation. • Strengthen institutions responsible for poverty-focused planning and monitoring • Improve transparency, participation and accountability of public policy makers. 2. Increase public parlicipation in poverty reduction, resource allocation and Management • Increase public participation in the budget planning and i .. expenditure management system 3. Ensure equitable allocation and access to resources for spatially i.~ deprived, vulnerable groups and the disabled. 4. Speed up the implementation of the anti-corruption agendn to •• ensure that resources allocated to the poor reaches them. 10. 5. Institute an oversight body to monitor and evaluate adopted poverty reduction and rights and protection strategies. 'iiI 6. Embark on a decentralization refonn to improve the capaciJy of local government institutions and civic organizations in the ... districts to incorporate poverty alleviation strategies in their operations. Workshop 1 Poverty April 19, 200 1 7 •• ,I WorkShop 2: The Golden Age Of Business, April 23, 2001 DISCUSSION GROUP I THE PRIVATE SECTOR Paper by Mona Caeser-Addo The paper was presented was presented to form the basis of the workgroup .. discussion on the pri vate sector. The paper gave a brief background on the current situation of the private sector. Investment by the private sector declined to low levels during the 1970s and early 1980s showing a declining trend during this period: from an annual average of7.9% of GDP in the first half and 3% of GDP during 1980- 83. At the same time private savings also dropped sharply. The economy experienced a dramatic financial swallowing and the real volume of bank intermediation fell. The major factor for this deterioration can be attributed to misguided government policies. Post 1983, the new financial reforms under the Economic Recovery Program was to stimulate a revival of the investment. However apart of from the gold mining industry private investment remained depressed, averaging 5% of GDP BY 1994 The paper also looked at the Government policies prior to the Economic Recovery Program (ERP) and investment Policies of the ERP. It also highlighted reasons why private investment has remained depressed. Some of these reasons include relative price changes, credit constraints, investment risk, and credit controls. The brief also made reference to President J.A Kuffour's sessional address in which the golden age of business was highlighted. The presenter noted that the vision is' a dynamic one, because the private sector is expected to lead in achieving economic growth of 8% per annum on average from now to 2015. The presenter however emphasized that the golden age of business would be achieved when there is • A verifiable exchange rate regime • Absence of Budgets • Controlled inflation • Easy access to foreign exchange • Market priced financing • Healthy competition n the service sector • Improved infrastructure to support production and distribution • A meaningful an easy to access information base • Reduced unemployment .. • Flexible labour market with performance based remuneration Fiscal and social discipline • 'W' • Improved investment and trade regime • Internationally accepted standards in all aspects of the economy • Free flow of capital and resources • A lean and effective pro-business civil service • An open, flexible and neutral policy framework within which private sector businesses, both foreign and domestic will be encouraged and can thrive on a sustainable basis. • Credibility for the regulatory institutions such as the Central Bank • Efforts to manage perception of political risk to Ghana and a better credit rating and investor friendly image. To achieve this Ghana must achieve international competitiveness to promote _ broad-based and rapid economic growth. There will be the need for a radical and sustained shift in the current policy framework to one that effectively implements an outward-oriented growth strategy based on rapid export growth. It is clear that because of the limited domestic market, and lack of foreign exchange and the competitive international markets, it is clear that non traditional exports must be the engine of growth, growing at more than 15% "". per annum from now to 2015. The real limitations that the traditional exports face are international pricing and limited levels of production, which are, factors that we cannot control. In continuing with traditional exports, we lose ... the opportunity to industrialize using primary products and to add value to processed exports. There is therefore the need to compete globally through the niche market, which is the non-traditional export. Although there is no .... absolute guarantee as to future performance, the past performance of the NTE'S show an increase of approximately $300 Million from 1991 to 1998. This represents an annual growth rate of 20% + per annum. The role of government will be to set and execute the regulatory, judicial and. legislative policies and framework within which the private sector can flourish thereby creating an enabling environment and the role of the private sector must be to engage government and the donor community in dialogue on.... addressing policy issues right through to implementation. Recommendations 1. Create an Enabling environment • Promote Private Sector and Public Sector dialogue • Improve the Macro economy • Pro- business civil service • Cut down on institutional processes e.g. Inter Revenue Service • Government to aggressively promote industrial zones I... Workshop 2 Golden Age, April 23, 2001 2 2. Aggressively Promote Non Traditional Exports • Tax breaks on NTE'S • Encourage artisans to form corporatives • Improve standards of finished products .... 3. Improve Private Assess to funds • Foreign savings - Set up a Ghana Fund • Limit Government Borrowing • Supporting small-scale associationsINGO'S in providing micro - finance .... 4. Improve information flow • Create an information database • Create easy access to information database 5. Create an International Trading Company • Assist in financing Ghanaian entrepreneurs DISCUSSION GROUP II Become a Leading Agro-Industrial Country By Year 2010 Paper by Dr. E.O. Asante ... The workshop discussed the basis for Ghana to become a leading Agro Industrial Country by the Year 2010. The presentation was a background for the discussions The issues for discussion were categorized into the following topics: • Assessment of current capabilities '. • Assessment of Northern Hemisphere demands for high value Agro-based products which Ghana could produce, process and market • Investments requirements to make Ghana a leading agro-industrial centre, -- and • Policy requirements to achieve this vision Following this, the workshop went into active discussion on all the sub-topics outlined above. The group stated that there was the need to demarcate production zones for specific agricultural commodities, ensure effective and Workshop 2 Golden Age, April 23, 2001 3 efficient use of natural resources and overall food security for the nation. It was further agreed that there was the need to critically assess the potential of basic commodities, such as crops and spices. On the issue of assessing the demands for high value agro-based products from the Northern Hemisphere, the group discussed the areas where Ghana could possibly have a comparative advantage, how to position Ghana's products in a competitive market, the maintenance of quality and expansion of exports to various destinations. The group noted that there were challenges to overcome as a result of low production, limited market destinations and issues relating to sanitary and phyto-sanitary conditions. Further discussions centred on the following: • How acquisition of land for agro projects can be easier • How to ensure water supply not dependent on the seasons • How to fund invest cost in agro-industry • Whether Ghana should cooperate in this area with other countries or compete • How Ghana can overcome unofficial trade barriers • Whether there would be political commitment • Whether language differences would not be a barrier to trade • How to market identical products or commodities on the same market Following extensive discussions on all the issues above, the group made recommendations for the country to become a Leading Agro-Industrial Country By Year 2010. Recommendations 1. Current Capabilities • Demonstrate the profitability of specified agricultural commodities in agro ecological zone. • Introduce measures to improve input and output marketing. 2. Assessment ofproducts which Ghana could produce, process and market to the Northern Hemisphere. .... • Improvement in Quality Assurance • Institute measures to penetrate other markets • Provision of Export Finance. "'. Workshop 2 Golden Age, April 23, 2001 4 3. Ensuring Export in Sub-region • Work towards the removal of trade barriers • Undertake studies into comparative advantages and potentials for specialization and complementation. to achieve vision of becoming an agro fill 4. Requirements for Ghana industrial centre by 2010 • Government to speed up implementation of land title registration programme including demarcation of stool lands • Government to develop and service acquired lands • Government to fund the establishment of small-scale inigations systems • Institute differential water and electricity tariffs for agricultural purposes. 5. Processing and Handling invest in • Provide incentives and infrastructural utilities to entice investors, and agro-processing and handling • Establish special projects to support potential investors in the sub-sector who • Government to assist Ghanaian investors to partner with foreign investors are interested in the sector. .. DISCUSSION GROUP III ECOWASand Regional Integration By Dr. D. Zormelo The aim was to examine ECOW AS and regional integration and propose pOlicy measures, that if pursued, would enhance Ghana's potential benefits from the scheme and make it a contributor to the country's development. by ECOW AS as a col\ecti ve decision making institution can only be driven it as the collective implementation by all members or at least those who see being able to add value to their development objectives. This means that Ghana's action alone will not create the environment for increased regional interaction and transactions. On the other hand, Ghana can lead in advocating collective action to make ECOWAS integration a reality by working closely with like-minded countries within the region to push the process forWard. Since Governments provide the enabling framework, the Minister of the Economic Planning and Regional Co-operation has to lead in spearheading move toward the realisation of the Trade Liberalisation Scheme. .... 5 - Workshop 2 Golden Age, April 23, 2001 ------,------ ECOWAS is important for the development of Ghana because she has a very small market, both in terms of population and incomes. Trends in the global economy and the organisation of production through strategic alliances, joint ventures, and direct foreign investment all require local markets. The Ghanaian domestic market itself is not adequate. This needs to be extended. That can only happen through regional integration and the establishment of, at least, a free trade area. Investors seeking partnership with Ghanaian businesses will be more attracted by the potential of the West African market than by the possibilities provided by the Ghanaian market alone. ECOWAS is also important because it will provide the framework for the European Union's future relationship with West African countries. In 2008, the African, Caribbean and Pacific (ACP) Group may be broken into Free Trade Area relationships. This is to make the current arrangement compatible with World Trade Organisation rules of non-discrimination. Preferential market access for countries, such as Ghana, into the European Union market will onl y be done through regional groupings. The financial aspects ofthe current Lome Convention may also be disaggregated to take account of the relative poverty of areas within the ACP Group. This means the region, rather than the individual country will be the basis for reallocating development funding from the European Union. Finally, industries in Ghana stand to gain if there is an effective regional scheme where they can export their goods. There will be a higher potential for expansion of their operations if the larger West African market becomes available. Employment opportunities will be enhanced and productivity might increase as the private sector responds to opportunities within the region. Situation Analysis Even though ECOWAS has been in existence since 1975, it has not been able to create the regional market that it was envisaged to do. Serious difficulties arise when goods are being exported from Ghana to member countries of ECOWAS. The ECOWAS Trade Liberalisation scheme has not worked because of non-compliance by Customs Officials. Ratification of protocols is low. The private sector is largely unaware of ECOWAS provisions. Unrealistic targets have been set for convergence of member countries to form a monetary zone. The organisation's institutions are not effective. There is not sufficient linkage between regional institutions and national ones. The fast track approach has been a reaction to UEMOA rather than one driven by strategy. The private sector is being largely left out again with Governments being the main actors. '''"'' Currently, Ghana has better market access in the European Union market under the Lome Convention, and into other developed country markets under Workshop 2 Golden Age, April 23, 2001 6 ,., 17 the Generalised System of Preferences and the African Growth and Opportunities Act. Recommendations 1. National and regional institutions need to be strengthened. goods 2. ECOWAS must facilitate the compliance and ease of movement of and services to • ECOWAS personnel must be placed at the various customs points '''' facilitate movement of goods through checkpoints with 3. Ghana must play an active role in the future relationship of ECOWAS the EU. • Position ECOW AS to begin negotiation in 2002 with the EU for the successor to the Lome Convention and also ensure that ECOW AS is recognised by the WTO and other major trading partners. • Ghana must take a front seat in driving the Trade Liberalisation Scheme. and the 4. The Private Sector must be informed and educated about ECOWAS provisions of the Treaty. • Establish an institutional mechanism for regular dialogue and consultation between and the private sector at national sub-regional levels 5. Ghana should demand performance contracts for personnel of the ECOWAS Secretariat. DISCUSSION GROUP IV Trade Reform Liberalisation Paper by Prof Bartholomew Armah (lEA) The workshop discussed Trade Reform Liberalisation with the aim of for enhancing Ghana's trade with its trading partners and to gain new partners by Prof the development of the country. The basis for discussion was a paper Bartholomew Armah on SELECTED ISSUES IN TRADE REFORM AND LIBERALISATION IN GHANA. Prof Armah took participants through various international trade organisations in and legislations such as the ACP-EU and AGOA. He then looked at this the light of Ghana's evolving trade policy. 7 - 2 Golden Age, April 23, 2001 Workshop Prof. Annah then discussed issues pertaining to Free Zones, Customs, Exchange Rate Policies and Domestic Competitiveness. He summarised his report by making the following recommendations: • Trade refonn must be embedded in the context of multilateral and regional trade agreements such as WTO, EU-ACP and AGOA. "",I • Ghana is to fonnulate a comprehensive trade Policy Document • Monitor and Review effective rates of protection in the context of real exchange rates ... • Accommodate non-statutory exemptions in existing tariff structure • Reduce commissioner's scope for granting discretionary exemptions • Tie incentives to the degree of value addition with respect to free trade zones • Adopt a transparent and credible exchange rate policy • Promote currency stability and avoid currency overvaluation through fiscal restraint. The participants then discussed the issues raised by Prof Annah and listed pertinent issues for consideration as follows: • Significance of Multilateral and Regional Agreements such as WTO, AGOA, ACP-EU, and strategies to exploit benefits accruing to Ghana under them • End of non-reciprocal trade regime in 2007 • Review and assessment of tariff, exchange rate policies and how they promote competitiveness • Promotion and negotiation of partnership agreements to make up for Ghana's production shortfalls • Ensuring effective rates of protection for high priority areas. The participants identified that there were bottlenecks inhibiting Ghana's ability to make maximum gains with respect to trade liberalization. These include: • The absence of a coherent strategic trade policy • No clear tariff guideline with respect to exemptions discretion • Poor monitoring of trade issues • Adverse effects of trade on some domestic products • Financing for the trade sector • Government support for the promotion of special sectors bordering on trade Workshop 2 Golden Age, April 23, 2001 8 19 ... • Ensuring macro-economic stability with respect to inflation, exchange rate and interest rates After exhausti ve discussions, the participants made the following recommendations to initiate trade reform and liberalization in Ghana. ,. Recommendations 1. Capacity Building • Specialised training centers for priority areas • Institutionalise apprenticeships ego GratisIfITU, OIC • Develop capacity through training of trainers programmes. 2. Undertake Research and Development • Create incentives for private sector funding for research and development through funding for existing institutions • Government to increase funding for research and development • Establish specialized research institutions where necessary for the each priority sector or expand the mandate of existing institutes .. 3. Extension Services • Expand mandate of research institutions to include expansion services • Forge closer links between research and extension services ~ • Organise more exhibitions I fairs to showcase research findings 4. Financing • Allocate the majority of EDIF funds to priority areas on merit • Existing export incentives must be tailored to priority areas • Eliminate non-statutory exemptions 5. Marketing • Boost advertisements, both domestic and foreign to increase demand for Ghanaian goods • Improve packaging through R&D and Tax incentives • Improve labeling by legislation 6. Tariffs • Lower tariffs on inputs for priority sectors for 5 years to boost and nurture production potential • To avoid reneging on this policy, it must be supported by an act of parliament. I wi Workshop 2 Golden Age, April 23, 2001 9 DISCUSSION GROUP V Information Technology as a Foreign Exchange Earner Paper by Olu Sawyerr The presenter described information technology as not only determining the market share and profitability of individual companies in tomorrow's global economy but that it also has a huge impact on future generations of workers and a "" country's prospects. The impact of IT on a country's economy will depend on its readiness to adapt to the changing environment. Countries that can not adapt will incur a growing technology deficit, thus increasing the' welfare gap' between it and industrialised countries. Other countries will adapt the new information technology to learn new ways of doing business in order to transform their economies. Data on the current status of the IT industry is difficult to come by. In terms of .... infrastructure, though Ghana is ahead of most of its neighbours, the provision of fixed wire and cellular telephones is well below the demand for these services. The Internet infrastructure is characterised by high cost and poor access quality caused by the low bandwidth available. Benchmarking with other less developed countries has enabled the identification of opportunities available to utilise IT to earn foreign exchange. The traditional view of IT is that it can act as an enabler, making it possible for export producers to ' disintermediate' middlemen and conduct business directly with export markets thereby increasing profitability and incentives to produce. IT can also increase the scope of tradeables in the services by permitting many professional services to become tradeable across borders. New areas of IT export income discussed by the workshop include: • Information Technology Services: This involves the promotion of local IT support services, exporting IT professional services, selling IT education abroad and exporting locally made software. • Internet Services: Taking advantage of the growth in global e-commerce. • Data Processing: Creating a Bulk Data Entry capability to take advantage of the global growth in this area and also making Ghana a leading country for outsourced data processing for companies in developed countries. • Manufacturing: Assembling hardware locally to reduce forex expenditure on importation and also to earn forex by exporting to other countries in the sub-region. Key impediments hampering the harnessing of the above opportunities were identified as: • Inadequate framework to support IT as a foreign exchange earner leading to poor communications infrastructure and high cost of access. '" • Lack of real competition in the telecommunications sector. Workshop 2 Golden Age, April 23, 2001 10 ,... 11 o Unclear roles of the ministry and the various agencies in the sector. o An inadequate IT human resource development programme leading to low numbers of trained professionals and a high cost of training - Brain Drain. o Low awareness of IT within government. No leadership by example. o Poor environment for the development of IT. "'I' Recommendations and Action Plans Five key recommendations were put forward by the workshop with action plans to facilitate their achievement. The recommendations in order of priority are: 1. Set up organisations to drive the development of information technology. o Government must set up a high-level apex committee drawing upon the best expertise avaiiable locally and internationally to advise it on strategy. o Government should encourage/facilitate the setting up of a national body made up of representatives of the industry to articulate the views of the industry. 2. Gather and maintain credible data on the IT industry and market and data on IT imports/exports. o Authorise/empower/resource the relevant ministry/department to carry out this function. 3. Create a conducive environment in which IT can flourish. o Each ministry to appoint a Chief InformaticslKnowledge Officer with the responsibility to advise on the design, development and implementation of information systems. o MDAs shall be required to prepare a five year IT plan. o An agreed percentage of every ministry's budget shall be earmarked for applying IT in the ministry including the procurement of IT consultancy services. o The government shall set up a central repository of data elements, which it will make accessible through the Internet. o Government will stipulate IT literacy as a requirement for all future government and public sector employment. 4. Accelerate Information Technology Human Resource developmenL o Apportion part of the Education Trust Fund for IT training or alternatively set up an IT Education Fund to which IT and other companies must contribute a portion of their profits. o Computers and the Internet must be made available in all secondary and tertiary institutions within a given time frame. o An IT course module will be made a compulsory component of all degree courses within an agreed timeframe. - Workshop 2 Golden Age, April 23, 2001 11 • Financial schemes should be introduced to enable every student, teacher or school wishing to do so buy a computer on easy payment terms. 5. Create Technology Parks. • Government should create the necessary incentives for joint ventures or to enable the private sector develop technology and business parks. • Government must direct utility companies or incentives them to make the provision of services to technology parks a major priority. Workshop 2 Golden Age, April 23, 2001 12 .. WorkShop 3: Education, Labour Market and Human Resource Development, May 2, 2001 Mr. Asamoah Boateng ~ (Office of the President) Mr. Asamoah set the tone for the workshop by stressing the need for deliberations on the Education, Labour market and human resource development. He introduced the TUC secretary general who he added would be acting as the convener to throw more light on the topic to be discussed at the work group sessions. He stressed that the workshop was to give the Ghanaian the opportunity to participate in the government's programs. He added that the Economic Dialogue is being organised under the Minister for Econ. Planning and Reg. Integration. He noted that the key reason for the National Economic Dialogue was to elicit contributions from the workgroups on specific issues and areas to be discussed at The .. National Economic Forum. Report on Three Day TUC Workshop on The labour market Mr. Kofi Asamoah .. (TUC) Convener ... Mr Kofi Asamoah gave an overview on a Workshop by the TUC on the labour market for the economic dialogue and gave brief summaries on recommendations on group discussions for four specific areas. • Employment in Ghana • Training and Capacity Building • Formal and Informal sector incomes • Productivity in both the formal and informal sectors On employment in Ghana, he stated that there are currently about 8 million people in the labour force. Of this number, 2 million people are either unemployed or underemployed. This he noted forms about 30% of the labour force. He explained that the causes of unemployment are caused by factors such as macro-economic imbalances, privatisation and retrenchment policies and problems of land tenure in the country. He stated that the groups' recommendations on generating more employment included some short-term measures including rehabilitating government bungalows, cleaning community sanitation, etc. Certain sources of funds proposed for paying salaries of these workers included government levies on imports and producers of plastic canned foods and the DA common fund. He identified the long-term creation of employment as the identification of needs right from the community to the national level (community participatory Assessment) and focussing on the creation of jobs. He also talked about employment creation in the agricultural sector and noted that the sector is the mainstream of the economy and stated that the paper recommended certain measures to make the sector a vibrant one. This he noted included solving the problem of land tenure to aid acquisition of land for agriculture, reclamation of farming lands, granting of farming equipment to DA,s and mobilisation of people into groups to make it easy for them to access inputs, funds and other logistics. He also stressed that the major problem areas for the agricultural sector included, funding, packaging, storage, marketing, technology, training and quality. He intimated that these problems were not peculiar to the sector but also applied to the Urban Informal sector and recommended stopping the wholesale trade liberalisation in the country, support to leading industries, government provision of incentives to the business community to enable them seek the development of industries across the length and breath of the country. This would help check the mobility of labour form the rural to the urban areas, lead to the establishment of cottage industries and engage women in processing agricultural products and support for existing women groups. He emphasised that the sustainability of employment was essential and could be achieved by monitoring employment generation as an integral part of the activities of social partners,. This he stressed could be done by the TUC exploring the possibility of directly or indirectly establishing an employment agency, the government conducting employment impact assessment on projects or policy they may want to implement, awareness and through research and development by stakeholders such as the .... government, TUC and other institution (such as Ministries,) Labour advisory Committee, DA.s etc. On productivity some of the key issues and recommendations were made from different perspectives. On the side of labour it was identified that there was the need for positive change in worker attitude. The union in collaboration with management should intensify worker education on ethics and procedures to avert unnecessary industrial impose and strikes and equitable productivity gain sharing. Union and management should continue education by organising workshops and seminars on laid down grievance procedures and the danger to life and property due to non-adherence. On the part of management it was recommended that there should be shared visions and goals objectives. On the part of the government it was encouraged to ensure productivity and fix realistic national minimum wages and collecti ve bargaining agreements. The groups noticed that low productivity, waste, and efficiency contributed toward low incomes in Ghana. The group recommended that to address productivity there was the need to solve inequality in incomes by solving expatriate versus Ghanaian incomes, Ghanaian versus Ghanaian (the case where Ghanaians employed in Ghana but seconded to donor Workshop 3 Education, Labour, & HRD, May 2, 2001 2 -..------their Ghanaian counterparts), sponsored projects are paid higher than Public. Also improving income Public versus Private and Public versus less borrowing from the levels by stabilising the macro environment, central bank among others. on capacity building including the stated the groups recommendations He standards board, for the establishment of a national occupational Manpower and Development to make government through the Ministry of audit, advocacy and awareness and available a data base as basis for skills to be operationalised at both the a national policy for capacity building levels. National and Sectoral organisational DISCUSSION GROUP I Financing Education in Ghana Paper by Prof. Djangmah from a paper presented by The main issues for discussion emanated Finance and Human Resource Professor 1.S. Djangmah on Education for the New Government. Development in Ghana: Suggestions schools, quality of education, the discussion centred on enrolment in The basic education for all, and constitutional requirement of free compulsory financing of education in Ghana. to for discussion as some of the ways Prof. Djangmah tabled the following finance education in Ghana; • Developing an Educational Industry Education Service (GES) and • Definition of new roles for Ghana the concept of decentralization, by Ministry of Education (MoE) within responsible for education within making the District Assemblies fully their districts of the Ghana Education Trust • Independent and efficient management Fund college programme. • Distance education I UG Workers the development of education as The group identified issues plaguing education, quality and content shortage and caliber of teachers, pre-school of civil society organisations of national curriculum, and the involvement in a collaborative effort with the and non-governmental organisations to finance the education. District Assemblies and other partners Recommendations and Action Plans 1. Develop Education Industry in the production & distribution of Ensure private sector participation textbooks and "all" educational materials. 3 HRD. May 2. 2001 Workshop 3 Education. Labour. & To this end, it was recommended that • GES & MoE be restructured to redefine their roles to cover training of teachers, curriculum development, certification, inspection and the use of technology to enable development of education, develop policy and professional standards as well as provision of an enabling environment for development of education, by the private sector. • The role of the District Assemblies in education should be redefined to make them more active in educational development and financing at the district level including the provision of infrastructure and the payment of teachers, instead of concentration on politcs. • Involve civil society, Parent Teacher Associations, Churches and other organisations in the mobilization of resources at the district level for educational development and financing. 2. Significantly improve basic education for all Basic education should begin with pre-school as this forms the basis for the development of the child and his Iher capability to understand and grasp the issues at school, as well as form the foundation for future learning. This has a gender dimension, as it would free mothers to engage in some form of employment. Specific recommendations included those below: • The process of National curriculum development, maintenance and - implementation should be free from politics • A demand driven curriculum required to bridge the gap and to ensure relevance to the needs of the public and private sectors. • Establish total cost of meeting constitutional requirement of "Free Basic Education" thus defining the gap which needs to be acted on. • Clearly define free education to include non discrimination, equity and differential access to make it accessible to those who most need it • The pre-school should focus on -Focus on teaching language and gender issues -Should be the primary investment of the District Assembly 3. Financing Education Funding for Education should be from various sources, and should include: The Education Fund, The establishment of an indirect educational levy (at 1.5% of incomes within both the formal and informal sectors), Traditional Authorities and District Assemblies raising funds jointly, NGOs, Religious Bodies and Civil Society Organisations assisting with funding education, Workshop 3 Education, Labour, & HRD, May 2, 2001 4 Corporate Bodies funding The commercialisation research at the tertiary of level, ... The research work, and establishment ofEducational Ghana. Insurance to fund education in • Specific recommendations centred on the • 60% of Education following; Fund should be • Work towards used for basic education t fulfilling constitutional work towards providing mandate to progressively • Education free education funding at the contribution District level should from each District include a percentage • District Assemblies Common Assemblies to Fund District contact private organisations to assist with funding within • Encourage pre-school education. the the private sector tax to be involved rebates. in education through DISCUSSION GROUP II Labour Market and Human Resource Development Dr. Kwabia Boateng A paper was presented on the Labour Market Development in Ghana and Human Resource the by Dr. K wabia Boateng, Department of Economics, a Labour Economist designed University of from to gather opinions Ghana. The workshop Economy from key stakeholders was on pertinent issues of the Ghanaian Economy. that hinder the growth Issues and recommendations of the National debate during identified will the National Economic be presented for - 15 May 2001. Dialogue that will be held on the 14 Dr. Boateng gave a brief introduction covers all the to the "Labour institutional arrangements Market" as one that exchange which directly of labour services facilitate the the labour in the economy which market. He explained guides and influences issues of economic that the labour market growth and is central to and inflation productivity; wealth the and unemployment. creation and poverty; A summary of the structure and 1998/1999 performance of the figures derived from Labour Market using that paid the Ghana Statistical employment in the Services indicated period formal sector declined between 1991/92 by 3.7% during and 1998/99. The the was the highest paid private formal employment and made the highest that same period under gain in terms of review. In the earning during fewer direct production private sector, there workers (middle appear to be workers) but or semi-professional more c1ericall secretariall class more management sales workers at the workers at the top. bottom and The performance of the Ghanaian include the Labour Market can following: be summarized to 5 jobs "'" of declining stable as a combination appear security - labour force who Worsening income majority of the • real earnings for and declining "'" immobile; widened; to be largely and losers have to between gainers smaller capacities The earnings gap of incomes) have • sectors (in terms • The prosperous imply disputes which absorb labour; causes of industrial of non-salary-related and or interpretation • Increasing with structures relations system problem with the industrial a fundamental agreements or collective bargaining a whole. as factor in any capital is a crucial the fact that human developed economies. stressed on growth of some The presenter over 60% of the and informal accounting for including formal World economy covers activities promotion. A capital formation and health but Human formation of attitudes, not only growth and training; formation affects for education human capital possibilities reported that hence the long-term Bank finding can create and of jobs business status. also the types middle income and achieving reducing poverty made at the workshop. five key recommendations Below are the TIME FRAME RECOMMENDATION Security Short-term Increase Income • Labour Medium-term • Improve Absorption Medium-term Skills and • Improve Mobility Relations Medium-term Organise Labour • Labour Medium-term • Improve Producti vi ty & Action Plans Recommendations MEASURE RESPONSIBILITY RECOMMENDATION Security (Job Income of startups 1. Improve Number MOTIICSIR Acreage covered Opportunities) information to business GOG Clean Environment Access Sector/ Cocoa Spraying Private Sanitation (Community) Community trees Number of Forestry planted Reforestation Department! Acreage covered of housing GOG Number GREDAf startups Estate Development Artisans Reduction of Post MOFA (Procesing) Food Production May 2, 2001 Labour, & HRD, Workshop 3 Education, Harvest losses Traditional Farming MOFAlDN Reduction in poveny Traditional incidence Authoritiesl NGO's 2. Improve Labour Absorption Capacity Strengthen the Export Sector (Direct MOTIf Export NTE support in Accessing Markets and Land) Promotion Council Push and Pull between the fonnal and MOTIf AGJJ Increased contact infonnal sectors (fonnalized linkages Chamber of between infonnal sub between small and large scale) Commerce contraction Land Tenure Refonn Serious Lands Commission Reduced number of negotiations between Government, the land disputes land owners and the District Assemblies 3. Improve Skills & Mobility Bring Public Sector, Private Sector and All Sectors Number of contacts tertiary institutions together between sectors and tertiary Proper focusing of student loans - GOGI Student redirect to needy students. Devise Loans Company screening process to identify needy students at District Levels National Service Scheme Refocusing Student Loans Post Service Rate Company GOG 4. Organise Labour Relations Institutionalisation of tripartite dialogue TUC/GOGI Reduction In at all levels (Convention 144) Employers industrial disputes Associati on Promote of bipartite dialogue TUC/GOGI Reduction in Employers industrial disputes Association Promote structures of participation TUC/GOGI Reduction in Employers industrial disputes Association 5. Improve Labour Productivity Implement National Productivity MOMDI Establishment of Movement Programme (A copy of which Employment Productivity can be obtained fonn MDPI) movement. DISCUSSION GROUP III Workshop 3 Education, Labour, & HRD, May 2, 2001 7 Health Care Financing '''' Paper by Mr. Daniel Mensah Discussions of the workshop developed on the basis of the presentation ''"' stressed the need to put in place a mechanism for financing health care delivery that would effectively cater for the entire spectrum of the population of Ghana. , .. In reviewing the current health care delivery system, it was noted that the government on its own accounted for 70% of health care delivery. This is ~"" seriously hampered by inadequate funding, which has also resulted in infrastructure and equipment being in a state of overwhelming disrepair. In order to arrive at alternatives to health care finance a description of the current system was given to help bring out the challenging issues of the health system. These issues included: • Inconvenience of the cash and carry system as a result of generally low income levels • Number of limited access to health care services ... • Poor quality of service provided • Inadequate funding of health services • Inefficient allocations of resources .... • Poor community, intersection and private sector linkages A comparison of health care delivery in other countries was made and it showed that majority of countries with efficient health care systems thrived on efficient health insurance schemes. It was recommended as an opportunity to be reviewed thoroughly since it has the potential to cover a wide scope of financing. In arriving at key recommendations for adopting health insurance, which ."" by definition is a method of providing members of a defined group or community with protection against the cost of medical care, the following lloti were considered: • Design features of a health insurance scheme • Types of Health insurance schemes .... • Enabling conditions for the establishment of a National Health insurance scheme • The demographic configurations of the population '.... Recommendations and Action Plans Summarised below are the key goals and corresponding action plans that resulted from the workshop discussion. 1. Replace the cash and carry system with a Multi-Fund Health '''' Insurance Scheme that reflects the demographic configuration of the Ghanaian population - Formal sector employees; Urban informal Workshop 3 Education, Labour, & HRD, May 2, 2001 8 111 sector; Rural informal sector; Pensioners; Cocoa and other farmers; the poor elderly, disadvantaged and destitute. • Government to establish a special independent institution (e.g. National Health Insurance Organisation) to help develop and promote the infonnal sector. • The following health insurance schemes to be established: • Government Employee Health Insurance Fund • Cocoa fanners! COCOBOD Health Insurance Scheme • Non-Profit Health Maintenance Organisation • Community Financed Health Insurance Scheme • Pensioners Health Insurance Fund • Medical Aid Scheme • Pilot schemes should be set up at targeted areas for no more than 1 year for evaluation and 2. Establish a Central Health Fund to ensure a healthy balance between such goals as solidarity and equity on one hand, and financial sustainability on the other hand. • The fund should be set up within 3 months of the establishment of the recommended National Health Insurance Organisation which will over see the promotion of the initiative. • Options for sources of funding for the CHF, should consider raising funds from VAT, health tax on tobacco, insurance companies, the banks and voluntary donations 3. Other uninsured! self-insured who have the ability to pay afee-for service basis should be able to enjoy quality healthcare services at an affordable cost. Workshop 3 Education, Labour. & HRD. May 2. 2001 9 WorkShop 4: Resources For Growth, May 3, 2001 DR. P.K. NDUOM [Minister for Econ. Planning & Regional Co-operation.] The minister's address was made up of three briefs namely: .... Energy sustainability and cost effectiveness, Infrastructure, Food and Agriculture. main 1. Energy sustainability and cost effectiveness: - He stated that the of issues were the continued price increases in energy supply, unreliability supply, and what safeguards would be implemented to protect consumer .... interests . He also urged the participants to discuss the issue of whether VRA and ECG should be privatized. and Matters concerning the Tema oil refinery such as future ownership, expansion plans were also to be considered by the work groups. some of 2. Infrastructure: - Attention was drawn to the deplorable state of and the country's roads. He appealed to participants to come out with ideas plans for a suitable roads network. as Points of view on whether government should opt for private sector, well as foreign investor participation were sought. 3. Food and Agriculture: - On agriculture Dr. Nduom called for measures that will improve food crop production in the country . ....' Since majority of Ghanaians are into food cultivation, standard of living may improve as a consequence. Participants were also urged to come up with new approaches to improve the viability and productivity of existing agricultural ventures. He assured participants that recommendations made during the workshop would be prioritized and debated on during the national economic forum. These will guide the government during policy formulation. DISCUSSION GROUP I Agriculture and Food Sector Paper by Dr. Nyanteng The paper served as a background for the workgroup to identify issues Low affecting the Agricultural sector, prioritise them, and recommend actions. that productivity in agriculture was attributed to low investment. Given agriculture contributes immensely to GDP (41 %). Government policy, key investment in technology, land and husbandry were identified as the thrusts to improving all other areas of the sector. These are also strongly influenced by government policy. potential Although agriculture plays a major role in the economy of Ghana, its parties was said to be undermined by the fact that it is not made attractive to for the that have access to the resources to invest in it. This is also responsible ----.------.------ lack of participation by the youth who have the ability to directly impact agricultural output. Participants were challenged to scale down the issues affecting the agriculture and food sector, and agree on key recommendations that could effectively accelerate the development of the sector. The issues were: 1. Land Tenure 8. Financing Agriculture 2. Agro-processing & storage 9. Marketing 3. Profitability 10. Agro Inputs 4. Government Policy 11. Farm Labour 5. Manpower Training 12. Irrigation, Soil & water Management 6. Agricultural Information 13. Road Infrastructure 7. Farming Systems 14. Research Although all the above issues need to be reviewed by government, priority was given to just four and these were selected in order of importance : Financing Agriculture, Marketing, Agro-processing and Government Policy. ... Recommendations and "'" Action Plans FINANCING AGRICULTURE 1. Provide fiscal advantages to banks to encourage financing and address the problem of non-availability offunds Action • Introduce tax rebates • Improve interest rates • Establish insurance schemes on loans 2. Rural banks to focus on agricultural activities ,_ Action • A percentage of banks portfolio to be allocated to agriculture with government support '"" 3. ADB's role shouldfocus on funding agriculture 4. Publicise availability offunds to stakeholders of the Agric. Sector Action • Decentralize infonnation through District Assemblies, MOFA, i~ GNAFF, print and electronic media Workshop 4 Resources For Growth, May 3, 2001 2 MARKETING 1. Support Department of Feeder Roads to rehabilitote and maintain selected routes 2. Make market information on input/ouiput price, supply and demand areas and road conditions to stakeholders Action • Create an agricultural database and make it accessible to all ., stakeholders 3. Encourage the nucleus-outgrower concept to address the problem of .... high transportation costs 4. Introduce the standardization of agricultural products AGRO-PROCESSING 1. Establish a cottage processing industry to address lm:k of appropriate equipment for processing of some crops 2. Create a revolving fund to finance the high cost of equipment and develop the agro-processing industry GOVERNMENT POLICY 1. Create targeted guaranteed prices and ready markets as incentives for farmers. •• 2. Review the clearing procedures of agricultural inputs at the ports to make them less cumbersome 3. Restore subsidies for selected agricultural inputs 4. Harmonize duties and tax procedure within the ECOWAS sub-region • DISCUSSION GROUP II Sustainable Energy r,.rGrowth .. The issues for discussion in this workshop centred on sources of energy for Ghana, achieving cost effective and sustainable energy supply for ., Power, Petroleum and Traditional Energy Sources. Energy was discussed in the context of the folIowing: • Production • • Marketing (Distribution & Retailing) • Efficient Utilisation • Environmental Impacts, and Workshop 4 Resoorces For Growth, May 3, 2001 3 / q..> • Financing. The discussion identified the sources of power to include the following; • Hydro • Thennal • Solar • Wind • Biomass, and • Nuclear. The group identified that currently, the country demands 8,000 megawatts hrs of power. Hydropower generates about 6,000 megawatts while thennal power generates 2,000 megawatts. The contribution of the various plants to power production were outlined as follows: li:!! • Akosombo(Hydro) 63% • Kpong (Hydro) 13% • Takoradi (Thennal) 19% ,.... In tenns of identifying the various sources of power generation as against their present and potential capacities, the group outlined the following: Sources of power, present & potential capacities Source Present CaDacity Potential Capacity Hydro 1072 megawatts 1200 megawatts Thennal 550 megawatts 1600 megawatts Solar Negligible 100 Wind 0 100 Biomass Negligible 100 Nuclear 0 400 The group then developed a table on demand at a rate of 6% and 10% per annum to be able to detennine the future power needs for the country. Presented below is a table depicting this: Demand for Power (2001.2020) 2001 2005 2010 2015 2020 Hydro@ 1200 1017 2027 2713 3630 6% growth '''' Hydro @ 1200 1757 2829 4557 7339 10% growth Thennal@ 1600 1892 2534 3391 4537 6% growth Thennal@ 1600 2196 3536 5690 9174 10% growth Workshop 4 Resources For Growth, May 3, 2001 4 q6 .'" The group identified options for power generation by the year 2005. Additional Demand for power was estimated to be 300 megawatts. To meet this requirement the following initiatives were identified: • VRA 2001-2005 plans to include the generation of a further 100 megawatts of power through its retrofit programme, generation of 100 megawatts of power from thermal and steam sources, and a further generation of 300 megawatts of power from combined cycle programme • GNPC to generate additional 125 megawatts of power form its barge The above can be achieved if the West Africa Gas Pipeline Project is fully implemented. - Other sources of power generation and their potential over the five-year horizon were outlined to include: • Wind IOmw • Biomass (Sawdust) 30mw • Biogas (based on animal waste) 2mw per city (Target Accra) "'" • Solar O.Smw • TORIECG (Cogeneration) 30mw The West Africa Gas Pipeline Project was therefore identified to be an important part of energy development in Ghana. The project is estimated to cost 80 million dollars (the Ghana Component) and VRA is to lead the funding syndication. It is expected that Equity funding would be from the Mining Companies, SSNIT, Insurance Companies and Private Ghanaian Institutions. Petroleum as an energy source generated lively discussion. The ministry responsible for energy gave an insight into policy guidelines for the sector. The ministry intends to deregulate the petroleum market with respect to exploration and prospecting, as well as refinery, bulk transportation and supply. The overall policy initiative is to reduce the ., cost of petroleum and make it affordable to all Ghanaians . To this end, the ministry would be concentrating activities on; • seismic surveys in deep sea areas (prospecting for oil) . • establishing plans to extract more products from residual fuel • developing infrastructure for the bulk carriage and storage of fuel to in major parts of the country • decentralisation of operations of power utilities (VRAJECG)). ECG would be broken into 5 utilities • Ensuring electricity reaches the doorstep of all Ghanaians by the year 2020 • Development of solar as an alternative means of providing energy especially in the North. 60 million dollars earmarked for this. i .. Recommendations and Action Plans 1. Accelerate Development of West African Gas Pipeline Workshop 4 Resources For Growth, May 3, 200] 5 11 Project Action • Accelerate development of Pipeline regulation • Ensure effective management of environmental issues ""; • Intensify regional cooperation among participating countries • Tariffs should be determined by the market based on productivity and efficiency I",. 2. Proceed with VRA & GNPC Development Plans 3. Encourage promotion of other renewable energy Sources • Sawdust should be used because it is environmentally friendly. Sawmills are to be encouraged to generate their own energy through the use of sawdust generated by their activities. • EeG (fOR co-generation project to be encouraged • Research into the use of palm kernel shell to generate energy. • Examine the possibility of using vegetable oil for the generati on of energy. 4. Ensure providers in energy sector promote efficient utilization of energy beyond 2005 • thermal • Buidam • Promotion of small-scale hydro dams 5. Ensure efficient full cost of recovery - tariffs ~ .., 7. Review feasibility of Nuclear energy production 8. VRA to divest non-core activities 9. Government should ensure the regular supply of petroleum whilst maintaining adequate supply stock 10. Deregulate oil marketing operations and prices 11. Ensure efficient production (TOR) • Issue of efficiency in production was linked to cutting waste in the energy sector, especially in the areas of electricity and petroleum 12. Encourage production of unleaded fuel by 2005(TOR to seek investment for the production of unleaded fuel) 13. Establish measures to manage the environmental implications of crude oil imports and residual oil disposal Workshop 4 Resources For Growth, May 3, 200 1 6 14. Encourage the use of LPG to reduce the extent of deforestation 15. Support GNPC to facilitate only the development of hydrocarbon resources DISCUSSION GROUP III Infrastructure and Economic Growth Grant Kesse The brief on Infrastructure for Economic Growth was presented by the Director of The ConsortiumlComptran Engineering and Planning ... Associates to the group at the workshop on infrastructure. Mr. Tac\cie defined infrastructure as services derived for the set of public works that is traditionally supported by the public sector to enhance private sector production and also allow for household consumption. The components of infrastructure include services provided by roads, mass transportation, water systems, sewerage systems, solid waste management, drainage and flood protection, electricity and telecommunications. Mass transportation covers air, rail, sea. and inland water bodies, and their accompanying physical assets. Mr. Tackie in his presentation noted that not all public infrastructure is provided by the public sector. Public services can be provided jointly .. by both sectors with different roles including: Financing, Construction, Consultancy, Operations and Maintenance, and Control. With the exception of roads where all roles are placed by the public sector, other areas like mass transportation represents extreme examples of total privatization with virtually no role for the Government. He however noted that in other countries privatization of certain infrastructure services have been provided by the private sector and it is more efficient than the system we currently use. Mr. Tackie stressed on the fact that all the components of infrastructure in Ghana have serious deficiencies in supply, quality and pricing. Other areas of concern raised include the lack of national policy on infrastructure delivery, a rudimentary approach to planning of infrastructure programmes, deficiency in Operations and Maintenance strategy, defects in Institutional arrangements, and the financing of infrastructure. In conclusion, there should be a special focus on infrastructure to deliver more reliable and safe services to the public. This calls for innovative technologies some of which may have to be transferred from countries with proven experiences. Ghana needs to move away from total dependence on donor and public financing of infrastructure to a good mix of private-public funding. Recommendations and Action Plans Preamble: Linking the National Infrastructure policy to the overall National Economic. Workshop 4 Resources For Growth, May 3, 2001 7 1. Needfor National Infrastructure Policy: (short term) Action • ReviewlEstablish sub-sector policies to develop national policy "'wi measured by a revised sub-sector document. • Survey & Analysis of Supply & Demand which the outcome will be a comprehensive database • Prepare a draft National Policy Document for review and adoption 2. Adoption of cross-sectoral planning (Integrated Planning) (medium term) Action ... • StrengthenlEstablish cross-sectoral and district institutions • Prepare individual sectoral & district planning processes • Establish necessary legal framework • Prepare an integrated document for National & cro.ss-sectoral planning for review and adoption 3. Institutionalise maintenance culture Action • Review current O&M practices across sectors and districts • Prepare Draft National O&M document for review & adoption • Prepare specific O&M plans and financial strategies for review and adoption • Prepare an integrated document for National & cross-sectoral planning for review and adoption 4. Adequate Human Resource Development (short term) Review of Legislative and Jurisdictional Boundaries • Rationalise current Ministerial! Institutional arrangements. e.g. Roads & Transport • ReviewlEstablish legislation and jurisdictional boundaries • Strengthen institutional capacity across sectors and districts • Provide Adequate incentives & remuneration 5. Redefine financing policy to reflect non-conventional sources (short term) • Review existing financing mechanism • Establish framework for private sector and other non conventional financing • Establish legal framework for private sector and other financing i~ II.,;#' Workshop 4 Resources For Growth, May 3, 2001 8 WorkShop 5: Economic Policy, May 4, 2001 Dr. Kwame Apraku (Minister of Trade and Industry) Dr. Apraku, the Minister for Trade and Industry presented a paper on the State of the Ghanaian Economy with specific emphasis on economic policies that have been adopted by the country so far. He begun his presentation by giving an overview of the state of the economy which he described as being weak. He proceeded to identify some critical issues that have to be addressed to enable the economy improve. Budget Deficit: ... The Budget Defict was described as the most fundamental problem that the country had. Dr. Apraku stated that in 1997 the budget deficit had been 8.5% and a commitment was made to systematically reduce it every year so that by the year 2001, the country would have a balanced budget. However this did not materialise since now in 2001, the budget deficit is between 8.5% and 9%. This he said clearly showed that nothing had been done. Dr. Apraku further went on to say that it was important to deal with the budget deficit because the private sector is currently being starved of funds and Government's increasing borrowing would lead to a state of instability. He appealed to participants to focus on the budget deficit as the most fundamental problem in the country today and once it was addressed, the process of stabilising the economy would have begun. He appealed to participants to come up with practical, credible and achievable ideas that would help in reducing the budget deficit such that it would be eliminated by the year 2005. The reduction of the budget deficit, could not however be done in isolation but in line with monetary policy to ensure that everything else is covered. Components of Fiscal Policy i. Restructuring Tax Administrative Systems Dr. Apraku said that the needed to be a fundamental overhaul of the tax administrative systems to reduce the corruption, tax avoidance and tax evasions. He also stated that requests for tax exemptions to his ministry were so many and measures had to be put in place to stop this practice since it had a negative effect on the economy of the country. He was of the view that revenue collection had to be improved. This he said could be done by putting an end to the corruption that occur at the destination inspection companies as a result of the collaboration between the companies ,importers and exporters. He reiterated the fact that there is a lot of money to be collected and urged participants identify creative ways by which the tax system of this country can be reformed. ------ ii. Restructuring Government Dr. Apraku admitted that there were a lot of inefficiencies that exist within the Governmental machinery. He stated that the world had undergone some significant changes, since the establishment of the various government .... institutions and as such, the role of the these institutions had to be redefined and a distinction made as to whether they are supposed to serve the private sector or the beauraucratic needs of Government. He further stated that, institutions that are designed to move the private sector forward need to be identified and their goals well defined to enable them accomplish it. Dr. Apraku said that Government was interested in a private sector oriented economy and this had to '>oj be reflected in the organisations and structures of government, budgetary allocations, policies and other programs. He also stated that there were certain agencies within the Government's structure that need to be abolished and their resources channelled into more producti ve areas that will advance the national agenda. Ill. Inflation With regards to inflation, Dr. Apraku said that once a good monetary policy was in place, inflation could be dealt with and policies would be put in place to '" address it. He also stated that to achieve this there had to be good coordination between fiscal and monetary policies. iv. Private Sector Dr. Apraku stated that the private sector has not been successful over the years since no success has been achieved in any specific area. He said there was the 111&\ need to identify about four key areas within which to excel so as to build confidence and arouse enthusiasm in the sector. The areas identified were: • Agro - Processing • Garment / Textile - Target the AGOA initiative • Fish Processing and export - Greater investment in deep sea fishing • Aluminium Products • Agricultural Sector - Diversify sector by collaborating with other countries who are well established in this sector v. Collaborating with other Ministries & decentralisation Dr. Apraku stressed that there had to be collaboration between the various ministries specifically the Ministries of Women Affairs, Trade and Industry and Local Government. He said this was because a large percentage of the country's population are in the rural areas and the bulk of small scale operators of the local industries in these areas are run by women. He further stated that success with the rural """ industries untimately resulted in the success of export programmes. '''''' Workshop 5 Economic Policy, May 4,2001 2 could be Dr. Apraku further stressed that decentralisation is a mechanisms that put in place to help address the poverty situation in rural Ghana. vi. Government Bo"owing for - Participants were urged to explore the possibility of setting a credit ceiling Government borrowing. DISCUSSION GROUP I .... The State of The Ghanaian Economy (A Macroeconomic Perspective) .. Paper by Dr. S. Ashong. (CEPA) The paper presented gave an overview of the state of the Ghanaian economy and recommended specific fiscal measures and its implications. topics: The state of the Ghanaian economy was discussed under the following • The Fiscal Stance • Monetary Developments • External Sector Developments • Domestic Debt ... year Dr. Ashong explained that various economic indicators at the end of the 2000 portrayed an economy in dire straits. Weak macroeconomic fundamentals and consequent upon an unsustainable combination of exchange rate, fiscal of the monetary policies, created the basis for economic crises. A manifestation the rate of fragile macroeconomic fundamental is reflected in the acceleration in large and inflation, unbearably high nominal interest rates, and the emergence of persistence fiscal imbalance. The current account-induced balance of 1999- payments- trigged by the external terms of trade of trade difficulties of long also intensified in 2000. In spite of the large depreciation of the cedi the quarter queues exchange from the banking systems that development in the third is of 1999 are yet to be eliminated. As a result the foreign exchange market badly distorted and is being threatened by resurgence of the dreaded black market. Unemployment for both the skilled and unskilled in rising. Despite in some improvements the level of poverty remains high and has deteriorated some regions in the country. Interest payments on the national debt have this become the largest single category of government spending programs that this crowding out some pressing social demands on the budget .. He noted given was not good for poverty alleviation and social stability of the nation heterogeneous composition of our ethnic structure., 3 Workshop 5 Economic Policy, May 4,2001 Given the crucial importance of fiscal efficiency and discipline in improving macroeconomic fundamental, the following fiscal measures were recommended by S. Ashong which formed the basis of the workgroup discussions: • Government revenues must be generated through real growth • A sustainable revenue base must dri ve government expenditures. Foreign assistance must playa complementary role and not a substitute i.~ for domestic effort • Divesture proceeds must be used exclusively to reduce the size of the domestic debt • Need to identify cost-push pressures that contribute t inflation and manage them well. Such pressures include energy cost and exchange rate depreciation • Interest payments on the national debt have become the largest single category of government spending programmes thus crowding out some other pressing social demands on the budget. This is not good for ... poverty alleviation and social stability of the nation given the heterogeneous composition of OUf ethnic structure • Failure to reduce interest burden on the budget would mean some cutbacks or tax increases or both. Unfortunately, such cutbacks more often than not disproportionately disadvantage the poor while the chosen tax handles have also a higher incidence on the same group • Efforts must be made to avoid any fiscal illusion. The practise whereby development expenditure is slashed to meet performance criteria targets often ignores quality issues. The composition of the expenditure of the expenditure both in terms of the sector mix and regional balance. More importantly, it only succeeds in reducing the country's future growth prospects while also increasing its reliance on foreign aid for development. • Need to consolidate and formalise all arrear both by the central government for an orderly retirement plan of the domestic debt to be formulated. • Proceeds form divesture sales should be used to primarily to retire the domestic debt, particularly those of short-term maturities. This will have the effect of reducing the interest burden on the budget in future years. He also outlined certain pressing issues for 2001. • A target of 5 percent real GDP growth is necessary, even though not sufficient, to have an impact on reducing poverty. • Average inflation of 35% and a December year-on-year of 20% appear to be the only realistic and credible targets without compromising growth prospects. Workshop 5 Economic Policy, May 4,2001 4 These require M2+ money supply growth to be constrained to no more than 20 percent December year-on-year basis. The budget must also be programmed in such a way that domestic borrowing by the government is reduced to the barest minimum. He noted that to achieve this the government would require about $350 million in net external aid inflows of which $300 million will be earmarked for budgetary support and $50 million used to support the balance of payments. Recommendations And Action Plans 1. IMPROVE RESOURCE MOBILIZATION Create a special bank account for Ghanaians in the Diaspora e.g. The Indian experience by January 2001. (MOF I Parliament (Under certificate of emergency) Critically examine and review import tax exemptions and reduce to barest minimum (Consider uniform tariff) by January 2002. (MOF I ... Parliament) Collecting Agencies (IRS,VAT,CEPS) • Decentralise revenue mobilisation by January, 2003 (MOF!Local Government) • Identify loop holes and plug them by June, 2001 .. (MOFIParliament) • Regular auditing • Improve capacity Set realistic revenue targets by June 2001. (IRS, VAT, CEPS, MOF) Comprehensive special database system to enhance revenue collection e.g. national ID cards by January 2002. (Local Govt) Enhance property tax collection (Especially in urban areas) • Check whether property tax is being collected effectively L DOMESTIC DEBT MANAGEMENT Restructure debt instrument by short to medium term. (MOF) • Workshop 5 Economic Policy, May 4,2001 5 ..... Divesture Proceeds should be used exclusively to reduce domestic debt by September 2001. (MOFIDIC) '... • Identify what is left to be diversified • Identify what is owed already (audit arrears) .... Formalise the informal debt e.g. contractor payments (audit stock of payment arrears) by December 2001. (MOFIBOGIMDA) 3. EXPENDITURE (Examine expenditure profile) ... Finish all viable existing projects before new ones are embarked upon to realise the full benefits from them. (MOFIParliament) ' ... Review procurement and contract system and come up with clear guidelines regarding procurements and awarding of contracts. MOFIParliament) Reduce transportation expenditure • Parking lots at entry points into cities by 2003 - Medium term. (Private Sector Participation) • Government vehicles should not be used after working hours - proposed to take effect immediately. (Chief of Staff/MOl) 4. SET MACRO ECONOMIC PERFORMANCE TARGETS A December year-on-year inflation rate between 20 - 25% should be achieved in order not to compromise growth prospects. (MOFIBOG) Government should balance budget by 2004. (MOFIBOG) Real growth of at least 5% needs to be achieved to have an impact· on reducing poverty. (BOGIMOF) DISCUSSION GROUP II Fiscal Discipline in Ghana Paper by Dr. George Apenteng The workshop discussed fiscal discipline in Ghana using the paper presented by Dr. George Apenteng of the Institute of Economic Affairs as the basis for the discussion. Dr. Apenteng postulated that the causes of increased fiscal vulnerability lies in the loss offiscal discipline of the government, which in tum can be attributed to Workshop 5 Economic Policy, May 4,2001 6 .'" rapidly rising government expenditure against the background ofstagnating government revenue. He explained that government spending in nominal tenns increased from fifteen billion cedis (¢ISbn) in 1983 to nine thousand, nine hundred trillion cedis (¢9.9 trillion) in year 2000. In less than a decade, debt service payments have increased from 10% to account for 39.3% of the total government outlays in year 2000. His paper discussed fiscal issues under the following sub-topics: • Tax Revenues • Government Expenditure • IRS, CEPS and VAT Secretariat • Bonded Warehousing and Free Zones System • Accessing Donor Inflows .. • Expenditure Overruns • Divestiture Receipts • Local Government Assemblies • Perfonnance of Donor Funded Expenditure Control Projects, and • The state of Government Accounts The recommendations flowing from his paper centred on: • Using divestiture proceeds for debt reduction and development • Seeking donor support under RIPC to bridge financing gap • Restructuring of Divestiture Implementation Committee • Promotion of a spirit of transparency and accountability • Raising of fuel prices to cost recovery levels • Minimizing of unproductive government expenditures • Harmonization of fiscal and monetary policy policies to curtail government .. borrowing to levels consistent with macro targets for second monetary zone. The group then discussed the issues raised and considered them for analysis, prioritization and allocation of responsibility for improvement. Critical issues for fiscal discipline were then outlined as: • Improved record keeping and monitoring of systems by the Ministry of Finance • Placing a ceiling on Government Borrowing • Regular reports on expenditure to be submitted to parliament by the Central Bank, and • Strengthening the institutional capacity the Ministry of Finance to manage independent flow systems on accrual basis. Based on the above, the group made recommendations to streamline and instill discipline into the country's financial management systems . • Workshop 5 Economic Policy, May 4,2001 7 181 Recommendations and Action Plans Recommendations for the improvement in fiscal discipline were made generally and specifically to cover expenditure, revenues and taxes, and attached responsibilities for the implementation of each recommendation to an appropriate sector ministry, department or agency. General Recommendations 1. Record Keeping and Monitoring This was further explained to mean the following: • Stock taking of debts and arrears. (Ministry of Finanace) • Flow reporting system on expenditure (Controller and Accountant iliW General) • Transparency and control systems (MOFIBOGlParliament/IMFIWoridBank) •.., 2. Borrowing ceiling to be pre-agreed. Alterations to be made by parliamentary approval only (MOFIBOG/ Parliament) 3. Central bank to report to Parliament regularly on borrowing. (Parliament) 4. Institutional capacity of Ministry of Finance to be strengthened to implement and run an accrual basis reporting system. (MOF IMDAs) Recommendations on Expenditure 1. Adoption of sectoral budgeting with defined output indicators and sectoral accountability sanctions (MOFIMDAs) 2. Decentralisation of sectoral Budget son a zero basis (MOFIMDAs) ,... This refers specifically to: • Medium Term Framework • Performance Incentives 3. Review the Divestiture process to make it transparent with respect to: • Valuation of Assets • Terms/ Timing of Payments • Maintenance of Asset Value Responsibility for this lies with Ministry of Finance and MDAs. Workshop 5 Economic Policy, May 4, 2001 8 Recommendations on Revenues 1. All divestiture proceeds should go towards debt reduction (MOFIMOm 2. Review the low base of non-tax income andfees revenue e.g District Assemblies, Police Service (MOFIParliament) Recommendations on Tax 1. Close Tax loophole e.g duty exemption, customs bonds (MOF) 2. Simplify customs duties e.g. 2flnt rates (MOF) 3. Establish Tax Audit Authority to quantify national tax potentioi (MOF) 4. Networking of Tax Agencies increase coordination and efficiency in tax collection (MOF/Proposed Tax Authority, IRS) DISCUSSION GROUP III Macro-economic Stabilization Paper by Dr. Gockel ... Ghana's economy was described as having multiple shades of macro-economic instability which were reflected largely in intractable inflation, persistent declining cedi-exchange rate and very high lending rates with large spreads . .... Hence these issues were selected to be the main focus of discussion in order to develop key recommendations. Dr. Gockel indicated that analysis has shown that by its action Bank of Ghana is controlling two important prices, the exchange rate and interest rates, through its interventionist policies and that, although there is an argument in favour of using a fixed exchange rate commitment as a nominal anchor for an inflation prone economy like Ghana, the exchange rate would still have a pro-equilibrium ., role for real targets, especially in response to adverse external shocks that call for a real depreciation that would not ordinarily be readily achieved through flexible domestic prices and wages. Participants were asked to note that while arguments for a nominal foreign exchange anchor are appealing, the shocks that tend to disturb Ghana's economy are fundamentally external and environmental. The choice of a • monetary target to manage inflation and other economic objectives would be more suitable than the exchange rate as a nominal anchor. Generally, two things were said to be required for the effective conduct of open market operations: (i) Bank of Ghana must have control over its balance sheet and (ii) there must exist a good professional money market . • Workshop 5 Economic Policy, May 4,2001 9 I.... A lot of concern was expressed over some of government's institutions that tend to have unlimited access to funds from the banking system and consequently impact Bank of Ghana's balance sheet. These institutions, namely VRA, TOR, ,... GNPC and ECG have acted independently to compound Government's fiscal deficits, especially as their debts were monetized by Bank of Ghana. Another major concern was the lack of transparency in the open market operations of the Bank of Ghana. Participants felt that if the bank resolved to be more transparent, it would go a long way to ensure that the price of the instruments will reflect the market price, and subsequently, trading in secondary '''' securities will also reflect changing market conditions, and attract capital gains or losses. In making recommendations participants concluded that transition from a highly controlled economy to a market-oriented financial system is a very complicated lui process and would entail tenacity of purpose. Recommendations and Action Plans The workshop developed five crucial recommendations with corresponding action plans which they felt were critical to macro-economic stabilisation and were the responsibilities of the Ministry of Finance and the Bank of Ghana. These recommendations are stated in order of priority. 1. Reduce Government Deficit to 0% by 2005 Actions • Establish an Act of parliament to regulate budget deficit and gov't borrowing • Parastatals (e.g. VRA, ECG, GNPC and TOR) should not be allowed to borrow directly from Bank of Ghana 2. Enforce the independence of Bank of Ghana Actions lloi • The number of Government appointees to the Board of BOG must be reduced • Government must appoint more technocrats to the BOG Board • Licensing & Liquidation of banking institutions should be the responsibility of BOG • Level of government borrowing at BOG should be agreed upon every year at the beginning of the year • The Governor of BOG should be the Exchange Controller and not the ,., Minister of Finance Workshop 5 Economic Policy, May 4,2001 10 3. Harmonize definition of 'Money' (M2+) with existing exchange control and Legal Tender regulations Action • Banks should be allowed to keep reserves in the currency they mobilize. 4. Increase transparency of BOG operations Action • This should include OMO & Foreign exchange operations • Establish an effective public affairs unit • Disseminate information through publications and workshops 5. Design and implement an orientation program for BOG staff and the banking industry Action • The Programs should include • Training • Workshops .. • Publications DISCUSSION GROUP IV Environment, Science & Technology Prof Akwasi Ayensu Deputy Director-General CSIRGH. The paper presented during the workshop emphasized on the fact that to raise the standard of livening of the citizenry and to maintain vibrant and high ... performing economy, it is necessary to adopt Science & Technology as the basis of achieving sustainable development. Such an action will require constant review of policy issues and political commitment, management issues, funding and prioritization of research and development, standards, and benchmarking and regularity framework on the environment. The presenter also touched on the fact that, environmental issues are pertinent to all aspects of economic development especially in infrastructure development, energy generation and agriCUlture. Prof. Ayensu also explained that Environment, Science and Technology pervades all sectors of the economy (agriculture, health, education, energy, environment, trade, industry, natural resources, human settlements, transport, communication, etc.) Hence, the need for horizontal and vertical linkages to ensure cost-effectiveness in implementing programmes. Researches should be carried out from laboratory through pilot plant operations to production and .. Workshop 5 Economic Policy, May 4,2001 11 \ II transfer of technology which requires a multidisciplinary approach for research results to be commercialized. E.g. Food processing - crop production, harvesting, storage, machinery, quality control and marketing - involves the following ministries: Finance, Environment, Science & Technology and Trade & Industry. Recommendations and Action Plans: 1. Institute a new management structure for Science & Technology development (appreciation, funding, political commitment) • Set up a new Apex body in the Office of the President (Best practice in all industrialising countries) • Improve linkages and coordination of Science & Technology activities • Institute programs for science acculturation in the citizenry 2. Develop comprehensive Techno-Economic Policy • Government to identify Strategic Industries that can promote our export of manufactured products. e.g. Aluminum & vehicle parts . • Develop skilled manpower for Science & Technology activities • Set up technology parks and incubation centres for innovation (non-project grants) 3. Building capacity for regulation and enforcement for restoration of degraded environment • Training of manpower for environmental issues • Provide equipment and other resources to environmental agencies • Integrate environmental concern in all development programs • Ensure efficient natural resources management • Promote the setting up of recycling plants • Enforce environmental sanitation regulations '.... iI \~ Workshop 5 Economic Policy, May 4, 2001 12 ,... Ghana-Vision 2020 The Second Step .. The long term goal of Ghana-Vision2020 is "to improve the social and economic status of all individuals and to eliminate extremes of deprivation by encouraging the creativity, enterprise and productivity of all citizens." Despite initial difficulties encountered in the effort to achieve middle income status within 25 years, ample evidence shows that the goal is attainable. The challenge for the next medium term plan, focuses on putting together the building blocks that would lead to structural transformation of the economy while reducing poverty significantly. The emphasis of rapid growth through accumulation and redistribution, as indicated in the Ghana Poverty Reduction Strategy, is maintained in the objectives and strategies for the policy framework ... In the review of the development performance under the first step of the initiative the following issues were raised: 1. The enormous human capacity problems in the management of policy, structures and institutions that would lead to growth and development have become obvious 2. Economic reforms have not been pursued in a consistent manner. 3. The inability to attract foreign investment makes it significantly difficult to finance public and private sector planned activities. 4. There is little incentive and opportunity for research and technology development due to lack of new investments 5. The continuity of poverty and weak management has collapsed all safety nets, there by inhibiting meaningful contributions to national - development by the poor. 6. The approach of decentralized administration has not had the expected impact on the problem of rural development due to enormous implementation omissions. The key issues identified influenced the focus of government policy in the medium term in the following areas: • Continuing Macroeconomic reforms • Capacity-Building • Development of Science and Technology Capacity for Production • Developing Safety Nets for the Poor • Ensuring the effectiveness of decentralization • Achieving Public-Private Partnerships Workshop 5 Economic Policy, May 4,2001 l3 WorkShop 6: Financial Sector, May 7, 2001 OPENING REMARKS DR. P. KWESI NDOUM (MIN. NEPRI) ... Dr. Ndoum opened the final day at the preparatory workshop toward the National Economic Dialogue by restating the purpose of the Economic Dialogue. He explained that the purpose of the preparatory workshops on the economy, the financial sector, poverty reduction, energy, and infrastructure was to come up with recommendations and action plans in a number of areas for the national Economic Dialogue. He entreated participants to come up with recommendations that are specific and action oriented. He added that that it was quite appropriate to end the workshop with a discussion on the financial sector (finance and investment), because without adequate investment (foreign and domestic) the country will not be able to grow into a prosperous nation. He noted that Ghana relies on official sources for its external financing. Official development assistance (aDA) is the main source of external financing of investment for Ghana and other low-income contraries. In 1998, aDA accounted for 84% of Total resource flows. Ghana has followed the prescriptions of the IMF and the World Bank to implement structural adjustments programmes (e.g. Iiberalised exchange regimes and trade) and the previous governments also introduced conditions that would improve the macroeconomic framework in the domestic market. However the results has not been good over the past fifteen years and where it has been good it has not been sustained. A recent study by the United Nations shows that savings-investment mechanism provides the link between the world of finance and development. According to UN the world saved about S 7.5 Trillion and substantial part was through domestic financial markets. The share of developing countries in global investments was around 23/%(S1.7). However countries like Ghana did not even show on the map of global investments. On Foreign Direct Investment (FDI) he noted that it plays a key role in financing domestic investment requirements and promoting rapid economic growth. However according to the UN the low income or least developed countries as a group received only 0.5% of world FDI flows in 1999. Ghana was listed by the International Finance Corporation (IFC) as receiving FDI in the period 1997-1999 of about 1% ofGDP. He noted that to attract FDI, countries like Ghana must spend more on social services such as education, water, sanitation, and transportation. However the kinds of funds required for these are not available because of the weak production base and lack of investment due to heavy debts and increasing poverty. He stressed that because of these issues there was a need for Ghana to change its strategy and look again at the Vision 2020, which has been very discouraging for the first five years. He entreated participants in the various groups to consider how • long-tenn capital could be raised and the role of pension systems (non-SSNIT), Ghana Stock Exchange and other NBFI' s could be enhanced. • to reduce the negative impact of the domestic debt on the budget in the short tenn and eliminate it altogether in the long-tenn. • the nation can derive most benefits from the HIPC initiative and ... reduce the impact of any negative side effects. • Ghana can become the leading financial centre in West Africa DISCUSSION GROUP I Ghana- The Leading Financial Centre in West Africa Paper by N.K. Opoku The key issues raised during the presentation and workshop focused on what it would take for Ghana to consolidate the necessary capital and expertise needed to facilitate international trade and finance. Other African countries, particularly Mauritius, have managed to become a reputable financial center in the region. It established itself a an offshore financial center in 1990 and launched its offshore business activities in 1992 by introducing legislation aimed at aimed at attracting and facilitating the financial business operations of investors worldwide. To ensure the realization of this objective, certain conditions were deemed as crucial for establishing Ghana as a leading financial centre, and these include • a stable and sound political environment • favourable and stable macroeconomic environment • broad range of business, financial legal services • multi-currency environment • professional multilingual staff • discretion and confidentiality experienced banking control • competitive fiscal framework • excellent telecommunications facilities • enterprise culture • well established legal judicial and administrative framework • efficient network of bilateral tax treaties for avoidance of double taxation on income and capital Several issues were identified as key problems that need to e addressed if Ghana was to become the hub of the sub-region. These include: • The slow and inefficient financial serviCes that currently exist • Ghana's tax regime although refonned still serves as a disincentive to trade and investment • High interest rates • Inhibitions to foreign exchange transfers • Weak telecommunications base .... Recommendations developed from this workshop were based on these key issues which if addressed effectively could position Ghana strategically Workshop 6 Finance May 7. 200 1 2 I ~( .~ enough to market comprehensive financial products and services that could ultimately promote international trade and investments in the region. Recommendations and - Action Plans 1. Review & improve legal/regulatory framework .. • Harmonise insurance regulation with Francophone West Africa countries with CIMA Code by January 2003 (MOF) • Review & eliminate conflict between insurance and tax laws by January 2002 (MOFINIC) • Review exchange control legislation by January 2002 (BOGIMOF) • Establish commercial courts by June 2oo2(Anorney General) ... • Introduce bankruptcy/insolvency laws by June 2002 (Anorney General) • Enact a data protection law by January 2oo3(Anorney General) • Investigate the feasibility of establishing a deposit insurance scheme ... 2. Create an offshore financial centre • Government should make a policy decision on the issue by June 2002 .,; 3. Develop new financial products & markets • Review in relation to international standards existing products to determine areas of improvement • Facilitate the introduction of new financial products: • Mutual funds • Unit Trust • Futures & options .. • Other derivative products • Develop adequate regulatory framework for new products 4. IMPROVE HUMAN RESOURCE AND TECHNOLOGY • Facilitate the establishment of credit rating/referencing agencies • Develop a strategic planning program to come up with initiatives to open up and improve the telecommunication industry • Develop multilingual capacity to enhance transactions with neighbouring W / A countries • include in school curriculum • provide tax breaks/incentives for financial institutions to train their staff • Capacity building within the financial regulatory environment - e.g. Bog, SEC, NIC, GSE 5. CREATE AN ENABUNG ENVIRONMENT THROUGH MACROECONOMIC .. STABIUTY • MOF to achieve a balance budget by 2003 Workshop 6 Finance May 7. 2001 3 • Single digit inflation by 2003 • Achieve GDP growth of 5-8% between ,., 2002-2004 • Debt as a percentage of GDP should be low (20%) • Government to stabilize currency • Foreign exchange reserves should cover at least 3 months imports by 2003 ,... DISCUSSION GROUP II I .... Long Term Capital for Growth Paper by Mr. Sam Mensah .... The purpose of the presentation was to assess the current situation to identify factors that impede the availability of long term funds for investment in the economy and develop recommendations that would help address the issues. Although Ghana has the instruments required to provide long term capital such as intermediaries like banks, non-bank financial institutions, .... development finance institutions, as well as securities firms, Ghanaian businesses still have difficulty accessing long term capital. Reasons given for this include environmental factors which include macroeconomic factors, domestic savings and the regulatory environment. It was emphasized that There will only be a meaningful market for long term I.. capital in an environment of fiscal monetary stability. Regulatory culture in Ghana was said to stifle financial innovations It displays overemphasis on protecting different market players rather than the system itself. I... Certain key instruments and institutional gaps were identified as lacking in the economy thereby making Ghanaian financial markets incomplete. These i... include: • Risk Management Instruments • Credit Information System I... • Fund Management Industry • Banking Sector Skills II .. For Ghanaian businesses to access a wider pool of long-term capital, it was recommended that further integration into the global financial system is needed. Recommendations and Action Plans 1. IMPLEMENT SCHEMES TO INCREASE LONG TERM SA VINGS/FUNDS '0.; • Review tax laws to create level playing field between SSNIT & other pension plans/savings schemes • Grant up-front tax exemptions for long term savings plans I... 2. SET UP A BODY TO FRAME A BALANCED BUDGET LAW THAT IS BINDING ON ALL GOVERNMENTS • Select panel of experts to form drafting body (MOFIMEPRC) Workshop 6 Finance May 7, 2001 4 3. IMPLEMENT THE FINANCIAL SECTOR STRATEGIC PLAN (2000) AS WELL AS PAST/PRESENT RECOMMENDATIONS (MOFIMEPRCIMOTIlPrivate Sector reps.) • Establish an oversight team comprising the private sector and responsible ministries. • Establish a secretariat (within MEPRC) to ensure sustainability & focus. 4. INTRODUCE INSTRUMENTS & INSTITUTIONS TO ENSURE COMPREHENSIVE FINANCIAL MARKETS • Enforce national identification scheme (Short term - NI & TIN numbers)(S~ITIURS) • Set up institution to implement universal & comprehensive national identification scheme(MEPRC) • Establish commercial courts • Establish credit rating and information system (Attorney General) • Utilise part of SSNIT and other investor funds to establish: - Venture Funds - Long term finance funds (MOFIMEPRCIMOTUSNNTD • Accelerate the introduction of the Ghana Investment Fund 5. ENCOURAGE FOREIGN PORTFOLIO INVESTMENTS • Review & reduce restrictions on portfolio investments to make Ghana competitive (MOFIBOG) DISCUSSION GROUP III Domestic Debt Management Dr. Nii K. Sowa, CEPA,Accra Ghana certainly faces a debt problem. In his presentation, Dr. Sowa described Ghana's domestic debt as a problem of the 1990s. Central Government gross domestic bonded debt alone stands at over 25% of national output and 123% of total budget revenue. He went on further to explain that the domestic debt attracts interest payments that far exceed government expenditures for development. The domestic debt has grown very fast over the last six years, with increasing deficit that has become structural. Dr. Sowa gave an introduction to the debt situation by explaining the following issues: • Evolution of the debt; • Nature of the debt; • Decomposition of the debt; and • Management of the debt. He explained in his paper that the domestic debt has become a problem not only because of its size but also the rate at which it is growing. The exact size of the debt is not known because of the presence of some payment arrears in the system and because of present limitation of coverage. A large Workshop 6 Finance May 7, 2001 5 portion of the debt is held in short tenn bonds with high real rates, which create a vicious circle for the debt burden. The fiscal and monetary consequences of the debt are enonnous with a threatening possibility of insolvency occurring in the near future. It is important to move the fiscal from the chronic deficit position into surpluses to reduce the growing threat I.. from the debt. The Government must divest some national assets and use the proceeds to reduce the debt. i... Recommendations and Action Plans: I... 1. Parliament and Attorney General to set up a committee to get handle on the size of the national debt (Short Term) • Capture debt and the size of payment arrears incurred by local and I... municipal authorities, State Owned Enterprises, and subvented organizations. 2. Restructure Debt (Short Term) '''' • The Ministry of Finance, Ministry of Economic Planning & Regional Coordination, and the Bank of Ghana to be charged with the responsibility of changing the debt from short-tenn to long tenn. • Bank of Ghana to differentiate between monetary and fiscal I... instruments. • Bank of Ghana and the Ministry of Finance to be responsible for the introduction of inflation-indexed paper 3. Tie Divestiture Proceeds to Reducing Current Debt Stock (Short Term) • The DIC and Attorney General to evaluate the size of the ,... outstanding proceeds • DIC to publish findings on the size of the outstanding proceeds • DIC to be charged with the responsibility of collection of outstanding proceeds. 4. Improve Fiscal Discipline (Short - Medium Term) • Ministry of Finance to set up a Revenue Agency Board • Revenue Agency Board to ensure the improvement of revenue generation • Parliament to ensure better expenditure management • Parliament to tie new borrowings to non-consumption expenditure • Ministry of Finance and the Ministry for Private Sector to ensure increased private sector led infrastructure development. DISCUSSION GROUP IV HIPC Paper by Prof. Kwadwo Asenso-Okyere (Dir. ISSER) The topic for the workshop discussion was the Highly Indebted Poor Countries Initiative. The discussions were led by Prof. Kwadwo Asenso Okyere through a paper he delivered on HIPC FOR AFRICA WITH SPECIAL REFERENCE TO GHANA. I... Workshop 6 Finance May 7, 2001 6 Prof. Asenso Okyere stated that development assistance was not new to Ghana, and that a lot of projects had been undertaken in the past with assistance from other countries for the construction of the Akosombo dam and other infrastructure. With respect to HIPC, he stated that Ghana is indeed a poor country, and quoted from the latest Ghana Living Standards Survey, which indicates that the current poverty level is now 40% of the population, with the incidence of extreme poverty being 26.8%. The debt situation came out as very grave. The country's debt profile was given as follows: Total Debt: ¢ 41 trillion $ 7.5 billion A breakdown of the foreign debt profile was also given as follows: IDA 56% Other Multilaterals 15% Japan 14% Other Bilaterals 8% .... Commercial 7% To bring relief to developing countries who were experiencing difficulties in meeting debt servicing obligations, the various creditors initiated various terms to assist and these include the Toronto Terms, London Terms and Naples Terms. When all these various terms did not yield the desired effect, the HIPC initiative was instituted. To qualify under the HIPC initiative, countries must • Per capita GDP of US$ 690 or less • Be undertaking lMF and World Bank supported adjustment and reform programmes, especially a poverty reduction and growth facility (pRGF) programme, which requires a poverty reduction strategy paper. .... • Be eligible of IDA and PRGF loans • Have unsustainable debt service burden • Ratio of exports to GDP equal to or greater than 30% • Ratio of revenue to GDP equal to or greater than 15% • Ratio of net present value of debt stock to exports less than 150% • Ratio of net present value of debt stock to revenue greater than 250% Ghana therefore qualified to join HIPC and joined the initiative in March 2001 after an lMFIWorld Bank - Ghana team jointly carried out a debt sustainability analysis, which confirmed Ghana's eligibility for HIPC assistance. The disadvantages of HIPC were given as being slow, complex and with stringent conditions attached, and to be followed prior to any relief. Having chosen to go HIPC also means that Ghana can no longer benefit from any more loans from Japan which would not want to over burden countries that have recognized that their debt overhand is too much. In conclusion, Prof. Asenso-Okyere gave 18 recommendations, which covered the following areas: • Negotiation with the Multilateral, Bilateral and Commercial creditors in order to obtain the best relief possible. Workshop 6 Finance May 7, 2001 7 D Monitoring of Ghana's progress under the initiative, leaving a door for exit if possible. ."" D Use the District Assemblies as the medium for rural development and poverty reduction D Maintenance of a stable macro-economy D Pursuance of a prudent fiscal policy D Reduction on Aid • Increase exports to maintain positive trade balance .... • Regulate domestic borrowing by government. The discussion of HIPC at the group level outlined the following issues as pertinent for consideration: • Reduction of Debt .... • Savings mobilization and domestic investment • Good governance • Monitoring effectively by Ghanaians • Increase in export earnings '" • Push for the realization of the convergence criteria of the West Africa Second Monetary Zone. I ... • Fiscal Discipline, and • More aggressive investment in agro processing The group, having discussed issues at length came up with recommendations '.. and action plans. Recommendations and Action Plans ...' 1. INCREASE EXPORT EARNINGS ""', • Raise Output of Cocoa to 600,000 metric tonnes per annum and add value to about a third oftotal output by 5 Years. (MOFA! COCOBODI Private la' Sector/) • Focus on Garments and Textiles within 2-4 years. (Office of the President! Enterprise Africa! MOTI! FAGE 1TUC) • Focus on a few Agricultural Products, eg, Cassava, Pineapple, Cashew, Papaw, Ostrich within 2-5 years. (MOFA! OP/ GEPC/ Private Sectorl ioi FAGElDAs) • Handicrafts - 1-3 Years (Private Sector/ GEPC / MOTI / MOT) • Capacity Building (MOE/ NGOsl Private Sector/ EMPRETEC) Human - Institutional ... , 2. MONITORING AND EVALUATION (Openness, Transparency and Needed. Account Reconciliation Essential) WI • Public Finance Ensure effective monitoring and evaluation of the Public Finances (Revenues and Expenditures) on quarterly basis. (Parliament! MOF !BOG IGSSI ... Auditor Gent Accountant Gen.! Sector Ministries) • External Accounts ~,i Workshop 6 Finance May 7, 2001 8 12.( Ensure effective monitoring and evaluation of the External Accounts (Balance of Payments) on a quarterly basis. (BOG I Statistical Service) • Special Statutory Funds DACF Road Fund .. Education Fund These funds are to be monitored to ensure they are properly utilized and accounted for on a quarterly basis. (Parliament! Sector MinistrieslMOFIAuditor GeneraVAccountant General • Set up system to effectively measure progress in poverty reduction on a yearly basis. (MEPRC I MLGRDINGOsl Statistical Service) • Maintain a stable Macro economy and pursue tight monetary policy to control: (GSSI BOG /MOF) Inflation (monthly) Exchange rate (weekly) Interest rate (monthly) Wage rate (monthly) Under age 5 mortality (2 years) Maternal Mortali ty (2 years) 2. DEBT NEGOTIATIONS • Multilateral Institutions ... Better terms Rescheduling Outright Cancellation Increase concessionality This should be done by (BOG /MOF ICivil Society) • Bilateral Institutions Better terms Rescheduling Outright Cancellation Grants This should be done by (BOG /MOF ICivil Society) • Commercial Institutions Better terms Rescheduling .. Outright Cancellation increase concessionality This should be done Parliament! Sector MinistriesIMOFIAuditor GeneraVAccountant General 3. POVERTY REDUCTION AND RURAL DEVEWPMENT Workshop 6 Finance May 7, 2001 9 \z.:z-. • Invest in rural infrastructure. (MRH I DAs I Private Sector NIP I '''' Relevant Sector Ministries INGOs I Civil Society Organisations) invest in rural road network and maintain existing rural roads ,.. electricity housing & environment water & sanitation schools clinics (health services) • Facilitate Income Generating Activities. (Rural Entrepreneurs I Rural CommunitieslNGOs I Financial Institutions I DAs) .... The focus here is to ensure the reduction of poverty through the development of income generating activities. '" 110/ ,.., \"" i.. I... t ... '''' I"", Workshop 6 Finance May 7, 200 I 10 10 .... IG """" HON. CHAIRIIAH PARlIAMENTARY SIJ8.CCI,U,IJTl 00\IlS & TRANSPORT """" HON. CHAIRIIAH PARlIAMENTARY St.JB.COt,Q,IJTTEE 1RAD£.1NO. & T~Pom\y CHAIRIIAH !'NC. CHIEF DIRECTOR MINISTRY OF HEAl.TH -..."""" CHIEF DIRECTOR MINISTRY OF WOMENS AFFA!RS -... CHIEF DIRECTOR GHANA EOllCATlON SERVICE F_-... CHIEF DlR.ECTOII GHANA HEAlTH SERVICE CHIEF DIRECTOR MINISTRY FOR PRIVATE SECTOR DEVElCAENT ,"""'" CHIEF DlRECTOR MINISTRY OF ECa«JM1C f'I..AM.ANG AND RtG. c(x)p. -... CHIEF DIRECTOR MINISTRY OF EDUCATION -... CHIEF DIRECTOR MINISTRY OF EtMROOMENT. SCIENCE & TECHNClOGY CHIEF DIRECTOR MINISTRY OF tINANCE -...""""" .. CHIEF DIRECTOR MINISTRY Of lOCAl. GOVERNMENT -... CHIEF DIRECTOR MINISTRY OF MINES & ENERGY CHIEF DIRECTOR M1NISTRV OF ROADS & HIGHWAYS '''''''''' CHIEF DIRECTOR MINISTRY OF TRADE & INDUSTRY -... .. CHIEF DIRECTOR MINISTRY OF TRANSPORT & COMMltOCATlON --... CHIEF DIRECTOR MINISTRY OF WORKS & HOUSING -... CHIEF EXEctmVE GHANACOCOA BOARD (COCOBOO) F_ CHIEF EXECUTIVE GHmA NATIONAl PET'ROlEUM CORPORATION """"" CHIEF EXECUTIVE GHANA SHIPPERS COI..NCIl (GSC) CHIEF EXECUTIVE TEMAOil REANERY -...""""" CHIEF EXECUTIVE veUA RIVER AUTHORITY ...... !Iii 3 :;-/ Master Invitation List for the National Economic Dialogue May 14 & 15, 2001 '-" prefix First Name Last Name Position Institutional Affiliation Syndicate CHIEF EXECUTiVE OFFICER KINGDOM TRANSPORT SERVICES Financial CHIEF EXECUTIVE OFFICER VANGUARD INSURANCE Financial CHIEF LABOUR OFFICER LABOUR DEPARTMENT Poverty MAJ. GIR.G. CLEMMONS NOU EMBASSY OF THE UNITED STATES Protocol MR. J. CLOITEY TECHNICAL DIRECTOR PRIVATE ENTERPRISE FOUNDATION (PEF) Business MR. O. COLEMAN MANAGING DIRECTOR AFWEllTD Poverty HDN. GRACE COLEMAN DEPUTY MINISTER MINISTRY OF FINANCE Poverty U COMMEH IV') GI$JREMOTE SENSING Business COUNTRY DIRECTOR CARE INTERNATIONAL Poverty COUNTRY DIRECTOR CATHOLIC RELIEF SERViCES Poverty COUNTRY DIRECTOR SAVE THE CHILDREN Poverty COUNTRY DIRECTOR TECHNOSEAVE Poverty MR. A. E. DADIZIE NOpe Educ &Labour PROF. JOHN DADSON DEPT. OF AGAIC.lECQNOMIC! UNIVERSITY OF GHANA Poverty OR PETERK DADZIE NDPC Economic KATI DAGADU Economic F.B. DANKWA BUSINESS MANAGER GAPVOD Educ &Labour OR. S.K. DAPAAH CHIEF DIRECTOR MINISTRY OF FOOD & AGRICUlTURE Poverty MR. KWABENA DARKO MANAGING DIRECTOR DARKO FARMS LTD. Poverty MR. EMMANUAL DARKO M.D. GHANA COMMUNITY NETWORK SERVICES lTD. Poverty "'" MRS. OIFTY PARKO MINTAH GRAND HILL FARM Poverty MS. OIFTY DARKQ-MINTABH PRIVATE ENTERPRISE FOUNDATION (PEF) Resources MS. DE LANGEN FIRST SECRETARY THE ROYAL EMBASSY OF THE NETHERLANDS Protocol MRS. Florence DENNIS SHIP OWNERS & AGENTS ASSOCIATION Resources DEP .SEC. GENERAL TRADES UNION CONGRESS Poverty DEP. SEC. GENERAL (OPS) TRADES UNION CONGRESS Poverty MR. PAUL DERIGUBAA PROGRAMME SPECIALIST UNOP Poverty DIRECTOR GHANA INSTITUTE OF JOURNALISM Poverty DIRECTOR MINISTRY OF MD. & E., DEPT. OF SOCIAL WELFARE Poverty DIRECTOR NATIONAL FILM & TELEVISION INST Poverty DIRECTOR NATIONAL VOCATIONAL & TRAINING INSTITUTE Poverty W. DIRECTOR UNICEF GHANA Poverty DIRECTOR GENERAL GHANA PORTS & HARBOUR AUTHORITY (GPHA) Poverty DIRECTOR GENERAL GIMPA Poverty DIRECTOR-6ENERAL GHANA CIVIL AVIATION AUTHORITY (GCM) Poverty OR. D.S. DJANGMAH IP) INSTITUTE OF ECONOMIC AFFAIRS (lEA) Educ&Labour MR K.CLETUS DORDUNOO PRIVATE CONSULTANT Financial ALHAJI ABDULA DRAMANI EXECUTIVE DIRECTOR ICODEHS (C/O GAPVOD) Poverty OR. KWABENA DUFOUR GOVERNOR BANK OF GHANA Financial i.,; MR. IKE DUKER MANAGING DIRECTOR CROWN AGENTS Poverty MRS. BEATRICE DUNCAN UNICEF Protocol J.V DUNCAN-WILLIAMS. PRESIDENT GHANA INSTITUTE OF ENGINEERS Poverty MR. LAURENT DURIEZ RESIDENT DIRECTOR CASSIES DU DEVELOPMONT (FRANCE) Protocol Maxwell Kofl Dwomoh CHIEF EXECUTIVE Kumasi Metropolitan authority Poverty OKO DZANIN/KOI MANAGING DIRECTOR NDI FINANCIAL SERVICES Poverty MR. WILLIAM E.INKUMSAH THOMPSON MOIR & GN...LOWAY Financial MR. EDWARD CHIEF CORRESPONDENT BUSINESS IN AFRICA MAGAZINE Poverty MS. MARIA ENING-HEIDENHOF DEPUTY CHIEF OF MISSION GERMAN EMBASSY Protocol OR. KOBENAGYAPEA ERBYNN NATIONAL DEVELOPMENT PLANNING COMMISSION Poverty EXECUTIVE DIRECTOR ASSOCIATION OF ECONOMIC & BUSINESS JOURNALISTS Financial EXECUTIVE DIRECTOR CHARTERED INSTITUTE OF BANKERS Financiat ,_ EXECUTiVE DIRECTOR INSTITUTE OF CHARTERED ACCOUNTANTS Financial EXECUTIVE DIRECTOR MANPOWER DEVELOPMENT AND PRODUCTIVITY INSTITUTI Financial EXECUTIVE DIRECTOR NATIONAL ASSOCIATION OF SMALL SCALE INDUSTRY Financial EXECUTiVE DIRECTOR NATIONAL ROAD SAFETY COMMISSION (NRSC) Financial EXECUTIVE DIRECTOR ACTION AID Poverty .w EXECUTIVE SECRETARY NATIONAL UNION OF POlYTECHNIC STUDENTS Economic EXECUTIVE SECRETARY ASSOCIATION OF RURN... BANKS Financial EXECUTIVE SECRETARY GHANA INVESTMENT PROMOTION CENTRE Financial EXECUTIVE SECRETARY GHANA NATIONAL ASSOCIATION OF TEACHERS Financial EXECUTIVE SECRETARY GHANA REGISTERED NURSES ASSOCIATION Financial EXECUTIVE SECRETARY GHANA TIMBER ASSOCIATION Financial EXECUTIVE SECRETARY NATIONAL UNION OF GHANAIAN STUDENTS Financial EXECUTIVE SECRETARY POlYTECHNIC TEACHERS ASSOCIATION OF GHANA Financial 1aJ. EXECUTIVE SECRETARY INSTITUTE OF DEMOCRACY AND GOVERNANCE Poverty ExeCUTIVE SECRETARY JUDICIAL SERVICES STAFF ASSOCIATION OF GHANA Poverty EXECUTIVE SECRETARY UNIVERSITY TEACHERS ASSOCIATION OF GHANA Poverty M~. Angela Brown Farhat NOPC Poverty It.~ G.A. FHRIBRAKO RICH SOIL LTO Poverty MRS. SHIRLEY·AWN FIAGOME NATIONN... DEVELOPMENT PLANNING COMMISSION Poverty