Nduom advocates home grown stimulus package

DR Paa Kwesi Nduom, the Convention People’s Party (CPP) 2008 Presidential Candidate has advocated a Gh¢ 5 billion home grown stimulus package to cushion the country against the spilling effect of the current global crises.
He also suggested that the government put together a team of experienced business people, experts from Bank of Ghana and the financial sector to be called “Ghana Domestic Business Stimulus Committee” who would select some local industries and assist them to build their capacities to make them globally competitive.
He said the team which would be headed by the President should identify beneficiary local enterprises, find ways of raising the funds required and ensure the effective implementation of the package.
Dr Nduom made the call at a press conference in Accra to suggest ways of enabling Ghanaians to gain control over the domestic economy and adopt nationalistic policies in the management of the nation’s development agenda.
“I am not asking us to copy the American, Japanese, British, French or Chinese stimulus package. .The kind of stimulus package I am calling for is one that will give the commanding heights of the economy to Ghanaians, domesticate the economy and create productive and sustainable jobs,” he added.
“This is not the time for textbook economics written for the developed markets, even the developed world is putting those textbooks aside and seeking practical solutions right for the times we are in, ”Dr Nduom added.
He said the policy thrust of the 2009 budget was to reduce the current budget deficit to a sustainable level, improve the exchange rate regime and work towards the attainment of single digit inflation.
“This policy thrust goes against the grain of what is needed to achieve self-determinations which requires growth and aggressive actions to get the productive sectors of the economy moving,” he advised.
On how the GH¢ 5 billion would be generated, he said the Government of Ghana should commit GH¢ 2 billion, Bank of Ghana would also cough up GH¢ 1.5 billion while financial institutions would also provide GH¢ 1.5 billion as their share of the low cost funding for the stimulus package.
He said aside these, the Parliament should adopt a “Buy Local” policy to ensure that the state used its purchasing power for goods and services produced locally to encourage local production and restrict imports through a combination of tax incentives, import tariffs and technical assistance.
Dr Nduom also suggested other means for achieving the capacity building of the local industry to compete favourably, transform the economy from a raw material producer to a manufacturing producer capable of creating jobs and wealth for Ghanaians.
He said firstly, government must support locally produced items such as fruit juices, electrical supplies, soaps, stationary, drugs, rice through hard and secure policies that restricted all government-funded organisations and projects to buy locally with no exceptions.
On the restriction of importation of consumer goods that could be produced locally, he said just as the European Union did not embrace all imports from every country without quotas, tariffs or special arrangements, Ghana could emulate the same.
He said Ghanaians must also bear in mind that great and prosperous nations were built on sacrifice and a high sense of patriotism and cited Japan that started production of products in smaller and less quality state but because their government supported them they had attained well-developed status.
Dr Nduom said it was high time the government spelt out its policy on value addition to raw materials prior to export that would ensure that the nation’s raw materials were not exported in their raw form at cheap prices to the western world.
He said although Ghanaians have great entrepreneurial ideas, the biggest stumbling block to the realisation of these vision was the lack of capital to start, continue and expand their dream industries.
However, he said, examples abound in the developing world that showed that state support was a means to building huge private industries.
He gave the example of Korea where the government under its Heavy and Chemical Industries Initiative, companies like the Goldstar, Hyundai, Samsung and Daewoo were nurtured and promoted through low interest government loans, tax incentives and export facilities to their current state.
Dr Nduom said the Ghana Domestic Business Stimulus Committee could emulate the Korean example to support selected private industries in the country to lead the way in industrialisation.
He called for the urgent need to accelerate the implementation of the new Pension Law which if diligently done and actively promoted would help accumulate a significant pool of long term money that could be used in financing productive ventures in the country.
He described as incomprehensible the situation of high interest rates and yet Ghanaians expected that agriculture and manufacturing, particularly agro processing would gain a boost.
According to him, the maximum level of interest rate should not exceed 15 per cent for those enterprises selected to participate in a stimulus packaged designed to strengthen local production capacity.
Dr Nduom said in addition to the funds ,the Bank of Ghana should provide to selected enterprises by the state, it must lead in the effort to reduce the cost of money that was used for productive purposes and not for buying and selling imported goods.