The Minister of Trade and Industry, Mr. Alan Kyerematen, has said the government has developed a blueprint on revamping the operations of businesses to enable them to take advantage of the opportunities offered under the Africa Continental Free Trade Area (AfCFTA) that took off in January this year.
It forms part of policies of the government to ensure that businesses benefit from the gains of the Africa single market.
According to Mr. Kyerematen, the policies are also aimed at easing the cost of credit, ensure constant supply of low-cost power to businesses and improve transportation infrastructure to allow for easy movement of goods and people across the country.
He further mentioned the proposed establishments of a domestic credit rating agency, a national development bank (NDB), the ongoing improvement in power generation and supply and the continuous modernisation and expansion of road infrastructure, and the Kumasi and the Tamale airports as some of the projects being pursued to revamp businesses.
Mr Kyerematen was speaking during a virtual Deloitte economic dialogue on the 2021 Budget Statement, where he was the Keynote Speaker yesterday.
The programme, which was organised by the accounting and auditing firm, was on the theme: “2021 Budget statement: Making Ghana a hub for the AfCFTA.”
It was hosted by the Country Managing Partner of Deloitte Ghana, Mr Daniel Kwadwo Owusu.
Among the objectives of the dialogue was how to explore the various policies and programmes in the budget to help realise the gains in the single market agreement.
Other speakers included a former Deputy Minister of Finance, Mrs Abena Osei Asare; the Chief Executive Officer of the Association of Ghana Industries (AGI), Mr Seth Twum-Akwaboah; the Managing Director of the Ghana Association of Bankers (GAB), Mr John Awuah, and Economist and a Professor of Finance at the University of Ghana, Prof. Godfred Bokpin.
Mr Kyerematen said there was no doubt that when opportunities contained in AfCFTA were properly harnessed, it could be a game-changer for the economic transformation of the country.
He said beyond positioning domestic businesses to tap into those opportunities, the government would also ensure companies were strong and resilient enough to stand the competition that the single trading area would bring to the economy.
According to Deloitte Ghana in its post-budget review report, AfCFTA provided opportunity for the private sector to access wider African markets by scaling up their operations and exporting their goods and services to other African countries.
“The government should support businesses, particularly in the manufacturing sector, to produce quality and affordable goods for export to other African countries. This support can be in the form of tax rebates, subsidies and other incentives for specific sectors of the economy,” the report added.
On the implications of tax measures announced in the budget, the firm said, for instance, the proposed increase of National Health Insurance Levy (NHIL) from 2.5 per cent to 3.5 per cent would result in a direct increase in the cost of standard-rated taxable purchases to entities and individuals.
It added that given that the NHIL formed part of the taxable base for standard rated value added tax (VAT), “implementation of this proposal will result in an increase in the VAT charged on standard-rated supplies and effectively, an increase in the general prices of taxable goods and services.
“Under the current regime, the effective standard VAT and levies rate is 18.125 per cent. The proposed increment will result in an increase in the effective standard VAT and levies rate to 19.25 per cent,” the firm said.