Ken Ofori-Atta
GOVERNMENT HAS outlined plans to create about one million jobs as part of a three-year strategy to address youth unemployment in the country.
Finance Minister, Ken Ofori-Atta, made this known during his presentation of the mid-year fiscal policy review to Parliament on Thursday, July 29, 2021.
According to him, though government, through its flagship programmes has created significant number of jobs, the issue of youth unemployment in the country still persisted, and it was thus putting measures in place to create more and better jobs for young Ghanaians, both in the public and private sectors of the economy.
Intractable Problem
“One of the serious impacts of the COVID-19 pandemic has been the loss of jobs, which has exacerbated the unemployment problem, particularly among the youth. As such, government is ready with a comprehensive programme to tackle this intractable problem. The goal is to create employment opportunities for a million of our young people over the next two and a half years by igniting a high spirit of entrepreneurship. We will count on the support of this august House,” he stated.
He added that, “I have had extensive discussions with my colleague Ministers of Employment and Labour Relations, Youth and Sports and Lands and Natural Resources. These conversations culminated in a comprehensive strategy to sustainably address youth unemployment. New programmes will be introduced and existing ones scaled-up and refocused to meet the aspirations of our youth.”
“We will work together to sensitise and connect the youth to the numerous opportunities being made available by Government programmes, including a three-year strategy to create job opportunities for 1 million Ghanaian youth. There are currently about five ongoing programmes through which we intend to create these jobs,” he said.
Mr. Ofori-Atta said the government’s plan to reboot the economy and set it back in motion through the GH¢100 billion Ghana CARES ‘Obaatanpa’ revitalisation programme will be vital in the country’s journey towards the creation of this 1 million jobs.
This, he said, would help accelerate competitive import substitution and export expansion to generate sustainable jobs for the teeming youth (under 35 years), which constituted about 71% of the population.
No New Taxes
The anticipation that Mr. Ofori-Atta was going to introduce more taxes for the already overstretched Ghanaian, did not materialise.
The Finance Minister swerved critics as he indicated that he did not come to the House to ask for more money, adding that he did not come to the House to ask for more taxes to warrant a supplementary budget since the government’s revised fiscal framework for 2021 was kept within the fiscal target of 9.5 per cent of GDP.
Instead, he said he was in Parliament to update the House on the performance of the economy for the first half-year of 2021 and the plans of the government for the unexpired term of the year, consistent with section 28 of the Public Financial Management (PFM) Act.
Competent Management
“Mr. Speaker, as a result of our competent management of the crisis situation, Ghana’s economy has outperformed its peers, recovering faster,” the minister stated, and continued that after recording negative growth in the second and third quarters of 2020, the economy rebounded strongly in the last quarter of the year, continuing well into the first quarter of 2021.
“The Ghana Statistical Service reports that overall GDP growth for first quarter 2021 was 3.1 per cent. The growth was even better excluding oil at 4.6 per cent,” he noted, and continued that the Bank of Ghana Composite Index of Economic Activity (CIEA) attests to the strong growth recovery, with the index growing at 33.1 per cent at the end of May 2021 compared to a contraction of 10.23 per cent at the end of May 2020.
On inflation, Mr. Ofori-Atta said Ghana was witnessing one of the lowest numbers on record in about two years, and pointed out that inflation, which, at the height of the pandemic, hovered around 11.8 per cent, dropped to 7.5 per cent in May 2021 before inching up slightly to 7.8 per cent in June.
“The Bank of Ghana will continue to implement appropriate monetary policy to maintain inflation rate within the target of 8+ -2 per cent,” he stated.
Cedi Stability
According to him, the cedi has been relatively stable in the past four years, and maintained its stability even in this pandemic year.
“For the first time in the Fourth Republic, the exchange rate did not see a spike after an election year. Cumulatively, from the beginning of the year to date, the exchange rate has depreciated by 0.6 per cent against the US dollar and appreciating by 3.6 per cent against the Euro.”
Strong Reserves Position
Mr. Ofori-Atta noted that the stability is expected to continue as the nation moves towards the close of the year, asserting that the relatively strong performance of the external sector led to an increase in the reserves position to US$11.0 billion, equivalent to 5.0 months of imports, one of the highest on record.
“This compares well with a reserved position of US$9.2 billion, equivalent to 4.3 months imports cover, in the corresponding period last year,” he pointed out.
He continued, “We are managing the finances of the country with discipline and competence. The fiscal operations for January to June 2021 indicate that the overall budget deficit was GH¢22.32 billion, equivalent to 5.1 per cent of GDP.”
The minister said the corresponding primary balance for the period was a deficit of GH¢7.3 billion, equivalent to 1.7 per cent of GDP, against a target deficit of GH¢4,797 or 1.1% of GDP.
“We will continue to pursue our fiscal consolidation agenda to ensure that we remain within the appropriation given by this House,” he assured the MPs.
Low Inflation
He said notwithstanding the country’s “elevated debt levels as a result of COVID-19, our inflation rate is lower than it was in 2016, our interest rates are lower than they were in 2016, our exchange rate is more stable than it was in 2016, our foreign exchange reserves are much higher than they were in 2016, and we did not have to lay off workers, nor cancel teacher and nursing training allowance.”
Mr. Ofori-Atta said the Akufo-Addo government did not go to the IMF for a bailout programme, nor has it built an interchange for the price of three, saying “this is because we have managed the economy much better than it was managed up to 2016.”
More FDI Attraction
He said on the back of deliberate policies, the country has attracted more foreign direct investments (FDI) in the midst of the pandemic, and said as of end-June 2021, total FDI into the country was valued at $954.2 million, which indicated an increase of 71.2 per cent from US$ 557.2 million recorded over the same period last year.
“Mr. Speaker, the strong rebound in growth, the low inflation rates, the stable currency, the strong reserve position and FDI flows are clear indicators of economic recovery,” he posited.
For him, the strategic investments that were collectively made in building strong economic fundamentals in the three years prior to the COVID-19 pandemic as well as the subsequent speed, scope and scale of the government’s socio-economic response to the pandemic, is fueling the recovery.
“I stand before this august House today to assure the nation that our transformation agenda is very much on course,” the Finance Minister declared.
Collective Approach
He, however, said with COVID-19 still with Ghana, the recovery was only the beginning that required the collective sense of responsibility of all Ghanaians and “action as citizens to guide, protect and participate in the recovery efforts.”
He also indicated that President Akufo-Addo’s promise to leave at the end of his term in January 2025, a legacy of a proud and confident nation at peace with itself and the world around it, was on course.
Boosting Economic Reach
“We are pushing the boundaries of our economic activity and doing so right from the centre of a fast-integrating single market for the continent of Africa.
“If we stay on course, Mr. Speaker, a few years from now, within this decade, Ghana’s strategic place at the centre of the African Continental Free Trade Area of one billion consumers and some US$2.5 trillion GDP and growing, will become a reality,” he argued.
According to him, the policies of the NPP government in education, infrastructural development, industrialisation, fast-tracking digital technologies, strengthening the financial services sector, and foreign diplomacy are all being deliberately pursued and synchronised to get this generation to establish sub-Saharan Africa’s first independent nation, Ghana, as the commercial and investment centre for Africa.
By Ernest Kofi Adu, Parliament House