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Home » POLITICS » Bawumia outlines 10-point plan for solving unemployment
Bawumia outlines 10-point plan for solving
unemployment
March 31, 2016 0 217 Views
Dr. Mahamudu Bawumia, NPP Vice-Presidential Candidate, has outlined a comprehensive
ten-point plan to boosting job creation and ending the massive joblessness that affects
millions of the Ghanaian youth today.
Dr. Bawumia laid out this plan during a Lecture on the topic – ‘High Graduate
Unemployment and the Employment Embargo, What is the Solution’ to students of the
Kwame Nkrumah University College at a Public Lecture organized by the Economics
Students Association on Tuesday.
He stated that the goal, for now, is to build the most people friendly and most business
friendly, globally competitive economy in Africa.
Formalizing the Economy
The first key, according to Dr. Bawumia, to creating the needed jobs and transforming the
Ghanaian economy is formalizing the economy. He noted that no developed economy could
have reached their current status without formalizing their economies.
He indicated that a comprehensive National identification database with unique identifiers
for each person and a well-functioning property address system were some of the pillars to
formalising the economy.
He said that a Data Revolution was critical to Ghana’s development, indicating that such a
Revolution would involve linking databases across institutions such as DVLA, Police, Courts,
Immigration, Revenue Agencies, etc.
“All modern economies all formalized. Formalization makes the collection of taxes, discipline
and job creation easier. The keys to formalizing an economy are the existence of a National
ID System and a functioning Property Address System. The benefits of a national ID system
or a unique identification number for residents and a well-functioning Property Address
System are significant. Activities of residents with regards to taxes, loan applications, crime,
job applications, housing, insurance, health, etc. are uniquely identifiable”, he said.
Dr. Bawumia also identified the movement from cash to electronic payments using mobile
and other ICT platforms as another pillar to formalizing the economy.
Financial Inclusion
The second key for Dr. Bawumia is financial inclusion – banking the unbanked.
“The financial system cannot develop to its potential and monetary policy cannot be
effective if the majority of the population continues to be excluded from access to financial
services. The importance and urgency of banking the unbanked is something that is clearly
not appreciated by many governments. As well as formalizing the economy, it holds the key
to reducing interest rates sustainably with the support of disciplined fiscal policy. This is
because banking the unbanked increases the supply of savings in the banking system.”
Citing examples from various countries, Dr. Bawumia noted that a deliberate governmental
policy was necessary to spur financial inclusion and that if achieved, it will ensure that
businesses can borrow at very low and stable rates to grow business and employ more.
“Wide access to financial services in the developed economies increased the supply of
savings in their banking systems and reduced the cost of borrowing,” he added.
Diversifying Export Base & Developing the Property Market
The third key, according to Dr. Bawumia, is diversifying the export base of the country and
deliberately pursuing policies to make Ghana the production hub in the sub-region to
attract the needed industries and investment to create jobs.
The fourth key in the ten point plan is developing the mortgage market which, according to
the NPP Vice-Presidential Candidate, holds the key to awakening the dead capital in
Ghana’s property market and boosting growth and jobs.
He noted that developing the mortgage market requires finding a solution to the issues that
bog land acquisition and streamlining the processes around the acquisition and
development of property.
“From our Zongos like Nima, our inner cities like James Town to our well-developed
neighbourhoods like East Legon in Accra, so many people do not have titles to land. Our
people are sitting on very valuable property but without title to them. Finding a solution to
this problem would jump-start the mortgage market in a big way.
“Solving this problem would increase the supply of houses by the private sector, empower
the poor who would be able to borrow against the collateral of their houses and start or
expand businesses, and result in a housing sector-led boom in the economy and higher tax
revenue for government.
“A blossoming Mortgage Market, with the necessary structures and pillars, will see openings
for several well-paying jobs which our youth can be beneficiaries of. The property market is
perhaps one of the most labour intensive sectors, and it is thus a critical cornerstone for an
economy that seeks to win the war against employment”, he said.
Favourable Policy Framework & Economic Stability
The fifth key to ending the massive joblessness that confronts the nation today is putting in
place a trade policy that encourages production, especially in key sectors Ghana has a
competitive advantage in and one that utilizes tax policy to boost production and jobs
instead of focusing on revenue to the detriment of production and jobs.
“Ghana should focus on providing the tax incentives for increasing production and
generating employment. In the process, revenue can be raised from corporate and income
taxes. What we should not allow to happen is for the desire to generate revenue to kill
businesses and cause unemployment”, he said.
Dr. Bawumia also stated that the institution of a tax credit incentive for businesses that
employ fresh graduates will encourage the hiring of more youths and discourage the
tendency of businesses to require ‘years of experience’ before they employing job seekers.
The sixth key to creating an economy of jobs is macro-economic stability and debt
sustainability.
Dr. Bawumia pointed out that macro-economic instability affects businesses negatively and
hinders business growth and employment. “High fiscal deficits, high current account
deficits, -high inflation, high-interest rates, exchange rate depreciation, do not provide
supportive environments for job creation. They in fact result in job losses”, he said.
“With such large scale borrowing, government is crowding out the private sector which is
unable to borrow to grow their business. Risk-free Treasury bill rates are around 25% (up
from 10.6% in 2011) and bank lending rates are on the rise because of excessive
government borrowing. Lending rates are now above 30 percent.
“This development means it has become virtually impossible for business to borrow in the
financial sector to grow and produce more. Government has today become the biggest
competitor to private business and by its actions squeezing the little life left in them.”
He noted that while the economic slump the country faces has discouraged several
investors from setting up businesses in Ghana, preferring countries like La Cote d’Ivoire and
others with favourable economic conditions, the situation had led the government into
introducing several desperate policies like astronomic increases in taxes, which had affected
businesses more negatively and the abolishment of several expenditure items, which is
hampering the development of the quality human resource needed by the country.
The four other critical keys to creating an economy of jobs which Dr. Bawumia explained
were increased infrastructure investment to match growth in economy and to support
production; addressing corruption, the cost of which is borne ultimately by businesses and
citizens, prioritizing Agriculture and ensuring value addition to raw materials and investing
in skills training and research.
Source: NPP Communications
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