The Minister of State at the presidency in-charge of Public, Private Partnership, Mr Rashid Pelpuo, has assured the private sector that the government will create the enabling environment that will put the sector at the centre of job creation in the economy.
Mr Pelpuo said as the government worked assiduously to change the structure of the economy, it would no more be involved in setting up companies, but would prop up the private sector to take the lead, while it gave the needed support to make the business environment conducive for the survival of the companies.
“The government admits that the country’s approach to job creation has to change drastically. The President prefers a more sustainable approach of letting the private sector lead the way in job creation.”
“The government will stop creating companies, but would focus on creating an enabling environment. To achieve that, a minister has been appointed for Private Sector Minister,” Mr Pelpuo said at a business breakfast forum organised by the Ghanaian-German Economic Association (GGEA).
The GGEA is made up of Ghanaian companies with affiliation or partnership with German and European as well as German companies, with interest in Ghana and the rest of West Africa. It supports the expatriate companies with information on Ghana and West Africa, while helping local businesses to find their way around the German economy and the Eurozone at large.
Mr Pelpuo said as part of the government weaning itself off direct intervention in the job market, it would not hand out cash to businesses as that was not sustainable, but expected companies to train their staff and build capacity to utilise such soft loans that were granted them for judicious and profitable use.
“We will partner the private sector and help small and medium-scale enterprises with capacity building to improve efficiency and competitiveness so as to grow beyond the borders of Ghana and also deliver the jobs for the people,” Mr Pelpuo stated.
Support for the private sector is anchored on the second Private Sector Development Strategy (PSDSII). Among other things, the strategy aims at supporting local businesses to be competitive, efficient and get access to long term capital and access markets.
The strategy was a preserve of the Ministry of Trade and Industry to implement in collaboration with other ministries. However, with the creation of the Minister in- charge of Public, Private Partnership, it is not clear which of the two ministers would have oversight responsibility over the implementation of the business growth blueprint.
Members of the GGEA also raised issues about the depreciation of the cedi and the measures announced by the Bank of Ghana, as well as how the new Value Added Tax (VAT), 2013 (Act 723 as amended) would impact on their operations.
The concerns included attempts to slap VAT on areas hitherto not captured by the act, particularly the financial services industry such as banking and insurance.
However, the Commissioner General of the Ghana Revenue Authority, Mr George Blankson, gave the assurance that the authority was holding consultations with identifiable bodies and industry associations to clearly delineate areas of incidence of the tax and implementation.
To that end, the GRA was engaging the Ghana Association of Bankers to identify non-core banking business where VAT would now apply, as well as areas in non-life insurance business which would attract VAT charges.
For the real estate industry, Mr Blankson said they had been placed under the exemption list, which meant that they could reclaim the VAT they paid on their inputs, and avoid paying VAT, except for an effective tax of up to 4.00 per cent in VAT.