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Isaac Osei
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THE RANKING Member for the Parliamentary Select Committee on Trade and Industry, Isaac Osei says President Atta Mills’ 2012 budget statement does not inspire hope for the nation’s industrial sector.

He said Ghanaian industries were facing serious challenges with high lending rates, soaring electricity tariffs as well as inadequate capital for investment and yet there were no pragmatic policy initiatives to alleviate their plight.

According to him, bank lending rates are so high that Ghanaian industries are rendered uncompetitive because while their competitors borrow at between 2 and 10 percent, they borrow at rates above 20 percent.

“Ghanaian companies cannot compete in their own domestic market and certainly not in the export markets,” Mr. Osei who is also the MP for Subin in Kumasi said.

Contributing to the ongoing budget debate on the floor of Parliament, the minority spokesperson on Trade and Industry said the growing cynicism of Ghanaians about politicians was because of the inability of the NDC administration to fulfill its manifesto promises and budget pledges.

Indicating there was not enough capital available for industries to borrow, he said there was nothing in the 2012 budget which suggested that the NDC government was working to reduce its borrowing requirements or that “the problems of our industries will be addressed.”

“A major problem is that there are no long-term funds in Ghana and no sound business will borrow short and invest long. This is an urgent matter which government has failed to address and it did not even merit a mention in the 2012 Budget,” Mr. Osei pointed.

He was optimistic that if Ghanaian manufacturing industries are supported with capital for investment they could generate all the employment that the country requires.

In his view, Ghanaian manufacturers are not investing and growing to employ more people because of high lending rates, adding “it is not surprising that the provisional outturn for growth in manufacturing in 2011 is only 1.9 percent as against an initial target of 7 percent.”

The Subin MP said although it was true that the policy rate had reduced significantly and the rate for money market instruments (91-days) had gone down to 9.1 percent, these had not reflected in significantly bringing down the lending rates.

The former Chief Executive of Ghana Cocoa Board (COCOBOD) further observed that while some base rates were below 20 percent, most industries still borrowed way above 20 percent.

Public sector borrowing requirements, Mr. Isaac added, have crowded out the private sector hence the high lending rates, stressing that the Ghanaian industry would need a reversal of infrastructural deficits especially in water and energy as they all add up to the cost of doing business.

The worrying phenomenon of frequent power outages did not only lead to unplanned investment in alternative sources of electricity which are costly but also tripped up and destroyed industrial equipment with high downtime.

Examining some of the pledges of the three stabilization budgets of 2009, 2010 and 2011 with respect to the trade and industry sector, he said government had failed to live up to its promises for the industry and manufacturing sectors, which are the engine of growth for job creation.

“For 2009, the NDC government pledged to produce a quarterly trade statistics bulletin to promote decision making but nothing was done and nothing has been done.

The ministry was to facilitate the establishment of shea nut processing factories in the three northern regions with a production capacity of 50,000 tons annually.

“We all know that no such factories exist in the Upper East and Upper West regions where most of the statements are picked,” he pointed out.

Government, he noted also promised to set up of an integrated sugar manufacturing project at Savelugu-Nanton to produce sugar and ethanol, which was to be supported by the Ministry of Trade and Industry.

Mr. Isaac Osei, a former Ghana High Commissioner to the UK, also took on the Mills administration for failing to fulfill its promises in the ‘Growth and Stability’ budget for fiscal year 2010 in which the President said the Eastern coastal areas stretching from Keta to Ada and Prampram and the stretch from Sekondi-Takoradi to Axim will be opened up for industrialization.

He also slammed government for reneging on its promise to exploit the bauxite deposits at Kibi in the Eastern region and Nyinahin in Ashanti region; Limestone in Buipe in the Northern region as well as iron ore at Opon Manso and Aboso in the Western region.

Chronicling more failed promises, Mr. Isaac Osei said President Mills promised in the 2010 budget to develop an industrial salt complex at Keta, a promise which was repeated in the 2011 Budget.

“The people of Keta still have to make do with artisanal salt making processes. Why make promises you know you can’t keep? Why deceive the people?” he quizzed rhetorically, asking the Mills administration to do more for industry and the manufacturing sector.
Source: Awudu Mahama/D-Guide

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