Section of the gathering . INSET: President Akufo-Addo
President Akufo-Addo yesterday made a strong case for Ghana in its quest to woe investors into the country.
He also described Ghana as the land of opportunities for private capital.
Addressing the 2017 ‘Development Finance Forum’ (DFF) by the World Bank in Accra under the theme, “Unlocking private investment in African markets,” he said, “More importantly, Ghana is open for business and has taken it upon herself to build a business-friendly economy that will enable her get to the stage where the opportunities available here will help her build an optimistic, self-confident and prosperous nation, beyond aid.”
This is the first time the forum is being held on an African soil.
Measures
To this end, he indicated that government has established a macroeconomic framework with policies that seek to restore fiscal discipline and macroeconomic stability.
“We have put in place measures to reduce the fiscal deficit bequeathed to us from 9% in 2016 to 6.5% this year,” he emphasised.
The President also mentioned that government has created fiscal space by capping earmarked funds to 25% of government revenue, and realigning expenditures to government priorities, saying “this is a policy that successive governments have tried over several years to implement, but were unable to do.”
“We have re-oriented fiscal policy from a focus on taxation to a focus on production, reason for which government has undertaken to abolish the 1% Special Import Levy, abolished the 17.5% VAT/NHIL on domestic airline tickets, abolished the 17.5% VAT/NHIL on financial services, abolished the 17.5% VAT/NHIL on selected imported medicines, that are not produced locally, abolished the 5% VAT/NHIL on Real Estate sales, replaced the 17.5 VAT/NHIL rate with a flat rate of 3 % for traders and granted Capital Gains Tax Exemption on stocks traded on the Ghana Stock Exchange or publicly held securities approved by the Securities and Exchange Commission.”
$2.5billion energy bond
He told the audience that “my government has also moved quickly to address the energy supply constraints by tackling the financial challenges of the sector, as well as defining a policy framework that would encourage private sector investment.”
“We will very soon issue a $2.5 billion energy sector bond to retire the legacy debt of the energy sector, and create space for increased investment in the sector,” he revealed.
Government has since reviewed the existing Power Purchase Agreements (PPAs).
Going forward, President Akufo-Addo indicated that “our policy is to move Ghana from a reliance on thermal towards renewable energy. We have, thus, decided that new PPAs will only be signed for renewable energy.”
Infrastructure projects
Furthermore, he stated that “my government has also decided, as a matter of policy, to seek more private sector equity financing for infrastructure projects, rather than the historic resort to borrowing and more borrowing that has resulted in the ballooning of our debt stock.”
That, according to him “is a policy underpinned by our commitment to the private sector, and by our desire to maintain debt sustainability.”
Debt re-profiling
On the issue of the huge debts inherited from the previous administration, he stressed that “we are implementing a policy of re-profiling our existing debts to extend the maturities, reduce the interest burden and create space for the private sector.”
“About six weeks ago, Ghana issued, for the first time, a 15-Year local-currency bond, raising in that cycle more than US$2 billion. That is evidence of the returning private investor confidence in Ghana. Because investors make decisions on the basis of their perception of risk and uncertainty, this transaction sends a clear message to the markets that this new government, my government, has started on a sound footing and that Ghana is on a path of fiscal consolidation, debt sustainability and growth,” he insisted.
“For example, a $700 million World Bank Group Guarantee enabled us mobilise $7.9 billion of private investment. These are the kinds of deals that should happen more often in Africa, as development finance institutions partner with private capital.”
By Charles Takyi-Boadu, Presidential Correspondent