Change Economic Policy - TUC Demands
“The key economic policy must change and the change must give the direction of abandoning inflation targeting, and switch to a process of employment targeting,” TUC has maintained.
Speaking at a seminar on jobs and livelihoods held in Accra last Thursday, the Director of the Labour Research and Policy Institute of the TUC, Mr Kwabena Nyarko Otoo, said government and Bank of Ghana’s preoccupation with targeting inflation and seeking to keep its low had been unsustainable, adding, “For 30 years we have always been consolidating all in the name of ensuring that we achieve a certain inflation target.”
The seminar, held under the auspices of the Economic and Justice Network, a civil society organisation, discussed issues on employment, growth and development in Ghana.
Mr Otoo noted that a deliberate policy to target employment would have two dimensions, one of which would spell out a direct role for government.
“In the short to medium term, to curb the rising unemployment situation in the country we expect government to employ people in the sanitation sector, the Police Service, the teaching profession and the health sector,” he said.
Stressing the need for government to support the private sector to stand on its feet, Mr Otoo said Ghana’s trade policy had to be consistent with the development objectives.
“We presently have a trade policy that throws our infant industries into the jungle of competition with countries such as China, Europe, Japan and the United States of America when Japanese businesses are borrowing at almost zero per cent interest rate,” he explained.
According to the TUC, there was no way businesses in Ghana could borrow at over 30 per cent interest rate and still be able to compete with Chinese businesses which had the benefit of the entire necessary infrastructure.
“We have actually over-liberalised,” he said.
The Union demanded that government address the interest rate problem.
“The only way for us is for government to intervene and regulate. The Institute of Economic Affairs has itself suggested that government need not control but must regulate the interest rate,” he added.
He recommended, “What government can do is that the difference between the deposit rate and the lending rate should be about eight per cent, which then means that the lending rate could be 30 per cent, but 22 per cent should be given for deposits, which would also motivate savings.”
The TUC also called for a rationalisation of the country’s tax system, saying it would help job creation.
The Union was unhappy about the fact that Ghana had made it a business of attracting foreign direct investments (FDIs) and nearly all investors coming into the country were coming into natural resource sectors because “we have made it a tax haven for them.”
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