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Business News of Friday, 5 September 1997

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National Economic Forum Enters Second Day

Accra, Sept. 3, The two-day National Economic Forum is getting closer to its goal of achieving consensus on the future direction of the management of the economy, representatives of the four subject matter groups indicated today. At a press briefing, they said in order to achieve a balance in the economy, government expenditures must be financed through additional revenue mobilisation. The briefing was organised to tell the press how the first day of discussions yesterday went. The groups are on macro-economic stability, agriculture, manufacturing and employment. The emerging consensus among the four groups is that excessive government deficit is harmful to achieving a balance or stability in the macro-economic framework. At the end of today's brain-storming debate, the groups are expected to build a consensus on implementable prescriptions or proposals which can be put into operation, within the context of the current state of the country's development. According to the representative of the macro-economic stability group, their progress was slower because it had a lot of areas to cover. These include government's expenditures, revenue mobilisation and monetary and fiscal policies. The macro-economic group said: "what seems to be emerging is that government must move away from the narrow definition of the nation's budget to a more broader definition which should include all foreign funded projects. The group is also close to a consensus that the government's expenditures need not be cut down. Rather it must be increased to give equal attention to all sectors of the economy. They also think that Ghana's real wage increases must be related to productivity. The Manufacturing group said it was concerned about the macro- economic conditions which, they said, hamper the sector's growth. ''As a first step, therefore, inflation must be brought down to enable the government to re-direct resources for financing deficits to improving the manufacturing sector,'' the group's representative said. It suggested that the government should stop borrowing from the public to avoid competing with and crowding out private borrowers from the same funds. It said per cent of proceeds from divestiture should be set aside to prop up the manufacturing sector through loans or development of industrial estates. The representative of the group on agriculture said it was recommended that there should be a policy that would enable small scale operators, including farmers, to gain easy access to credit facilities, extension services and marketing outlets. The group said market women need to be assisted financially through tax holidays. Such credits, either in cash or in kind, should be provided at the time that they are needed, so that beneficiaries would not be tempted to diver t such assistance for other purposes. The group suggested that the nucleus out-growing system should be extended to other cash crops and farmers should benefit from appropriate improved technology. They also suggested an effective linkage of price stabilisation policy and storage to agricultural programmes. Farmers should also be provided with adequate information on sectors of the industry, including marketing and pricing. The group on employment, according to its representative, stressed the urgent need for a new national training policy that would take care of training and human resource development. The said Ghanaians should change their attitude towards achievement of the goals set in the Vision document. The four groups will come out with final recommendations at the end of the day.