Since the turn of this year, the government of Ghana has “purposefully been pursuing the Phase II of the Ghana CARES programme to revitalise the economy and set it on track for transformation”, Finance Minister Ken Ofori-Atta has told parliament in the mid-year budget review on Thursday, July 29, 2021.
“We are emboldened in this course, knowing that the initiatives in the Stabilisation Phase (Phase I) have been vital in sustaining the quality of life of our people and the prospects of our economic recovery. Six months on, permit me to highlight the progress made thus far and the work to be accomplished in the remaining part of the year, he said.
The implementation of Ghana CARES the minister noted, “is focused first in providing dedicated resources to MDAs to expand and to accelerate progress in the implementation of their programmes that are aligned to the priority targets in the CARES Programme”.
“To date, ‘Compacts’ have been signed between the Ministry of Finance and a number of MDAs specifying specific results to be achieved by the MDA and the catalytic resources to be provided by the Ministry of Finance. Each Compact includes a clear Results Tracking Framework, with the further releases of funds tied to performance. I am happy to report that this exciting performance-based arrangement is up and running; the catalytic resources have started flowing and the MDAs are energised and getting on with their activities”, the minister told the house.
“Mr Speaker, I am also happy to report that under the Ghana CARES programme, we have made considerable progress toward our pledge to create a well-lubricated financial ecosystem to support the private sector in revitalising and transforming the economy. In doing this, we are paying special attention to anchor wealth-building for our youth”.
Also, Mr Ofori-Atta said “with adequate capitalisation, we are ready to operationalise Development Bank Ghana (DBG) in the third quarter of this year to help address critical financial constraints faced by our businesses. DBG will mobilise funds from both the domestic and international markets to support the private sector to invest in a medium- to long-term basis. DBG will, thus, unlock long-term financing for actors in the manufacturing, agriculture, agro-processing, mortgage, and housing sub-sectors to propel economic growth, create jobs and improve domestic revenue mobilisation”.
Read excerpts of the minister’s presentation on Ghana CARES “Obaatan Pa” Programme below:
Mr Speaker, with every crisis, the need to re-structure and diversify the economy becomes imperative. The recent experience of the COVID-19 pandemic, with its disruptive impact on global and regional value chains, has once again highlighted the need to build a transformed Ghana that is prosperous enough to be beyond needing aid, and that engages competitively with the rest of the world through trade and investment.
The severe socioeconomic consequences of this pandemic is widely known. Even as we prioritised the immediate health and safety of Ghanaians, the Government focus was on our economic recovery. We did this, knowing that a robust and sustainable rebound would be critical to re-capturing the lost gains and keeping our country on a path of transformation towards a Ghana Beyond Aid.
It was important for the Government in the midst of the crisis to think outside the box and formulate a bold strategy that was three-pronged; stabilise the economy following the disruption, revitalise the economy and seize the opportunity that the crisis presented to transform the structure of the economy.
Mr Speaker, under the transformation we envisage, Government would support the private sector to accelerate industrialisation, deepen our competitive import substitution drive, and to leverage digitalisation to raise productivity and create jobs. The government would also create the needed financial ecosystem to provide long-term and sustainable funding for our businesses as well as retraining those who have lost jobs as a result of the pandemic. Our approach puts a premium on workers and businesses using their skills and innovation in new ways in a commercial environment that is increasingly regionally integrated.
Mr Speaker, it is precisely for this reason that in November 2020, Government, working together with the private sector and a wide range of stakeholders, designed and launched the audacious GH¢100 billion Ghana COVID-19 Alleviation and Revitalisation of Enterprises Support (Ghana CARES) “Obaatan Pa” Programme.
This is a two-phased programme to be implemented over three and half years. Phase I of the programme – the Stabilisation Phase – built on the immediate life-saving measures that the Government had taken to respond to the pandemic. This was achieved by implementing additional measures through the end of 2020 focused on protecting the livelihoods of Ghanaians facing economic challenges due to the pandemic.
Phase II of the programme focuses on the revitalisation and transformation of the economy, and it will be implemented from 2021 to the end-2023. As already articulated, our approach under this programme is to catalyse the private sector in targeted sectors to fast-track industrialisation, competitive import substitution, digitalisation, export expansion and the creation of decent jobs, particularly for our youth. Mr Speaker, the transformative interventions under the Ghana CARES programme will be underpinned by structural reforms in the business environment to support private investment, economic diversification and job creation.
Since the turn of this year, we have purposefully been pursuing the Phase II of the Ghana CARES programme to revitalise the economy and set it on track for transformation. We are emboldened in this course, knowing that the initiatives in the Stabilisation Phase (Phase I) have been vital in sustaining the quality of life of our people and the prospects of our economic recovery. Six months on, permit me to highlight the progress made thus far and the work to be accomplished in the remaining part of the year.
Mr Speaker, implementation of Ghana CARES is focused first on providing dedicated resources to MDAs to expand and to accelerate progress in the implementation of their programmes that are aligned to the priority targets in the CARES Programme. To date, “Compacts” have been signed between the Ministry of Finance and a number of MDAs specifying specific results to be achieved by the MDA and the catalytic resources to be provided by the Ministry of Finance. Each Compact includes a clear Results Tracking Framework, with the further releases of funds tied to performance. I am happy to report that this exciting performance-based arrangement is up and running; the catalytic resources have started flowing and the MDAs are energised and getting on with their activities.
Mr Speaker, I am also happy to report that under the Ghana CARES programme, we have made considerable progress toward our pledge to create a well-lubricated financial ecosystem to support the private sector in revitalising and transforming the economy. In doing this, we are paying special attention to anchor wealth-building for our youth.
Mr Speaker, with adequate capitalisation, we are ready to operationalise Development Bank Ghana (DBG) in the third quarter of this year to help address critical financial constraints faced by our businesses. DBG will mobilise funds from both the domestic and international markets to support the private sector to invest in a medium- to long-term basis. DBG will, thus, unlock long-term financing for actors in the manufacturing, agriculture, agro-processing, mortgage, and housing sub-sectors to propel economic growth, create jobs and improve domestic revenue mobilisation.
Mr Speaker, for almost two years now the Ghana Incentive-based and Risk Sharing Scheme for Agricultural Lending (GIRSAL), has been providing guarantees and technical assistance to banks to lower the risks that they perceive in lending to agriculture. This is beginning to increase the volume and improve the terms of bank lending to agriculture and agribusiness. Under Ghana CARES, Government will continue to support GIRSAL to strengthen its operations. We have also made available additional funding through GIRSAL to
support the operationalisation of the CARES COVID-19 Guarantee Scheme, which will allow Medium and Large-Scale Enterprises to access funding from financial institutions on improved terms to help them respond to the economic challenges of the pandemic and sustain employment for our people.
Mr Speaker, under Ghana CARES, we are providing additional support to the Ghana Commodity Exchange (GCX) this year to strengthen its operations. This support will strengthen the GCX to play its critical role in reducing post-harvest losses, providing better access to agricultural and financial markets, creating jobs and improving livelihoods for all actors along the agricultural value chain.
To provide financial resources for the development and promotion of venture capital financing for Small and Medium Enterprises (SMEs) in priority sectors under Ghana CARES, we are also supporting the Venture Capital Trust Fund (VCTF) this year. The support will enable the VCTF to tremendously impact financing for venture capitalists, especially the youth, in Ghana.
Mr Speaker, in support of the Government’s agenda to provide sustainable and completed affordable housing, we are providing funds to the National Housing and Mortgage Fund (NHMF). This Fund, to be matched by participating financial institutions, will provide low mortgage interest rates of between 11 per cent and 12 per cent as compared to the current market rates between 25 per cent and 26 per cent. Through this intervention, which builds upon and expands the pilot project implemented last year, our quest to promote homeownership while boosting the domestic construction sector to provide more jobs, is on course.
Mr Speaker, we are delighted to have completed the institutional rationalisation and subsequently launched the Ghana Enterprises Agency (GEA), as a dedicated robust institution to promote the development of Ghanaian MSMEs. The GEA is now better positioned to respond to the growing needs of MSMEs and play a lead role to strengthen the capacity as well as the competitiveness of the enterprises in Ghana. With additional funding and strategic partnership of reputable international organisations, GEA is ready to expand the frontiers of MSMEs in Ghana.
Mr Speaker, we are doing more to unleash the spirit of entrepreneurship by easing the constraints in business regulatory processes this year. Through the Ghana Economic Transformation project, the Ministry of Trade and Industry, GIPC and other MDAs are accelerating ongoing reforms to enhance the business environment. Our target is to improve Ghana’s “Doing Business” ranking to be in the top-100 globally and in the top 5 in Africa by end-2023. The achievement of this will facilitate the attraction of more investments to generate decent jobs for our youth as part of our strategy under Ghana CARES.
Mr Speaker, together, DBG, GCX, GEA, GIIF, GIRSAL, VCTF, NHMF, GIPC and the accompanying reforms of the business regulatory environment and underpinned by our investment in human capital through SHS, COTVET and STEAM, form a well-crafted set of institutions and reforms that anchors a new age of entrepreneurship, job creation and wealth building for our post-COVID transformation. The prospects of business and entrepreneurship have been given the needed boost through this ecosystem.
Mr Speaker, Government continues to prioritise the modernisation of the agricultural sector under Ghana CARES. The aim is to accelerate rapid competitive import-substitution for targeted food crops, support commercial farming (particularly by the youth), increase food security, and the supply of raw materials (at scale, high quality and high reliability) to our agro-processing industries—for value-addition, job creation, exports, and industrialisation.
Mr Speaker, in view of this, Ghana CARES, with the Ministry of Food and Agriculture as the lead, is investing in initiatives that will improve production and productivity in the rice, poultry, soybean, and tomato sub-sectors this year to complement existing interventions under the Planting for Food and Jobs. The government’s recent engagement with all the value-chain actors in these sub-sectors has helped sharpen the focus of investments and brought a more holistic view to the issues we are confronting in these sectors. We are therefore providing interest rate subsidies, facilitating equipment acquisition, linking markets and promoting relevant research for these sectors. The youth are being supported this year to become out-growers for anchor farmers to boost their participation in commercial farming.
Mr Speaker, Ghana CARES is also investing in data and digital technology for the agricultural sector. These technologies are meant to revolutionise and improve efficiency in the targeting of interventions such as fertilisers, seed inputs, extension services and acquisition of land for commercial farming.
Mr Speaker, accelerated expansion of Ghana’s light manufacturing is a focus under Ghana CARES. Led by the Ministry of Trade and Industry, Ghana CARES is delivering dedicated support to expand the processing capacity of businesses in the Pharmaceutical, Cassava, Garments and Textiles industries to increase exports and create additional jobs. Specific interventions include support for the cassava value chain, provision of technical assistance to the Garment and Textiles as well as the Pharmaceutical industries. Key pharmaceutical manufacturing companies will be supported to upgrade their operations to reach Good Manufacturing Practice Standards. Additionally, Government is supporting the textile and garment firms to establish an industrial park at the new Dawa Industrial Park, which will boost exports and create additional jobs under the Ghana CARES programme.
Mr Speaker, rapid acquisition of capabilities to manufacture machine tools to support industrialisation is a major priority under Ghana CARES. Support is therefore being provided to the Ministry of Environment, Science, Technology and Innovation (MESTI) to establish and equip a Foundry to enable the fabrication of machinery and tools. The process to identify a suitable private sector operator to manage the Foundry is ongoing. We are also providing incentives to the private sector to manufacture key agricultural implements and prototype industrial research on a commercial basis.
Mr Speaker, the Tourism, Arts and Culture sector was perhaps the most affected by this pandemic. Government is cognisant of the enormous potential of this sector in creating jobs, earning foreign exchange and projecting Ghana for investment. Led by the Ministry of Tourism and Creative Arts, we are therefore aggressively promoting international and domestic tourism through Ghana CARES by supporting the modernisation and development of identified tourist sites.
We are also upgrading the skill sets of sector operators, working to reduce the cost of doing business and improving the competitiveness of enterprises in the sector, as well as transforming targeted tourist beaches such as Sakumono, Axim and Elmina to increase patronage.
Mr Speaker, Ghana CARES is providing catalytic investment through the Ministry of Communications and Digitalisation for the development of communication infrastructure this year. In addition, the Ministry is also being supported to establish digital and innovations hubs in other cities of the country beyond Accra.
Mr Speaker, Government is consolidating and expediting projects on Smart Workplace, National ID, Digital address systems, Land Records Digitisation, Births and Death Registry, Health Records Digitisation, virtual learning platforms this year to bridge the digital divide for the benefit of all citizens.
Mr Speaker, ongoing efforts to consolidate the fibre assets of VRA, ECG, GRIDCo, Ghana Gas, BNC, GIFEC and others are being sustained under this programme. We are also enhancing the capacity of key institutions and improving coordination with the private sector for quality service delivery to facilitate business expansion and economic transformation.
Mr Speaker, Government is aware of the critical importance of additional revenue to finance all these initiatives that underpin our recovery and transformation agenda. Indeed, we are committed to raising our tax-to-GDP ratio from the current 14 per cent to 20 per cent as our peers in the sub-region. The Ghana Revenue Authority is therefore implementing a transformation agenda to block the huge leakages in key sectors of the economy. This transformation agenda is not just about mobilising more revenues, it is equally about doing so efficiently through technology and integrated data systems.
Mr Speaker, we have also established the Revenue Assurance and Compliance Enforcement (RACE) Initiative to complement the efforts of the Ghana Revenue Authority (GRA). The remit of RACE is to identify and eliminate revenue leakages while reinforcing the culture of compliance nationwide. A formal launch of this Initiative is scheduled for early August 2021.
Mr Speaker, Government has already highlighted the crucial role the Ghana Investment Promotion Centre (GIPC) has to play in our recovery and transformation agenda. To enable the GIPC to assist in mobilising the GH¢70billion in private sector investment target under Ghana CARES, we are supporting the GIPC to be aggressive and more targeted in seeking investment into the prioritised sectors. With the intentional and dedicated effort to attract global and regional brands in the likes of Twitter, Google will be re-invigorated and leveraged to grow local enterprises.
Mr Speaker, early 2020, His Excellency the President charged his Government to seize the opportunities the COVID-19 pandemic presents and do things differently to meaningfully change our country. This is the spirit that has motivated the design and implementation of the Ghana CARES Programme so far, and it is the spirit that will continue to drive implementation going forward on our journey towards economic transformation and true economic independence; a journey to a Ghana Beyond Aid.