Ghana still far behind in exports drive - Panellists

Accra (Greater Accra), 23rd June 99 ?

Contributors at a three-day lecture on "The economy after six years of constitutional rule" on Tuesday night said Ghana is still far behind in its quest to diversify its exports.

They maintained that little had changed since the 1920s when the economy depended about 83 per cent on primary commodities such as cocoa, gold and timber.

They held the view that attempts to diversify exports had rather led to the expansion of primary commodities in the form of non-traditional products, adding that this could have dire consequences for the economy in the 21st century unless urgent corrective measures were taken.

The lecture, which is under the theme "Six years of constitutional rule in Ghana: assessment and prospects", is being organised by the Ghana Academy of Arts and Sciences and the Friedrich Ebert Foundation.

The main speakers were Dr Kwabena Duffuor, Governor of the Bank of Ghana, and Dr J. S. L. Abbey, Head of the Centre for Policy Analysis (CEPA).

Dr Duffuor said local industries are faced with the problems of poor packaging, poor marketing strategies and other structural setbacks that hamper their ability to meet demands from the international market even after they had struck contracts.

He said the advent of democracy and its attendant establishment of democratic institutions, decentralisation and elections put enormous pressure on public finances.

The Central Bank has tried to cushion the effects on monetary flows with measures such as the transfer of government financial holdings from commercial banks, the shift of aid financing from the Central Bank to commercial banks and the clampdown on forex bureaux transactions in foreign exchange transfers.

Dr Duffuor stressed the need for government to improve upon its budget planning to avoid perennial deficits.

Government also has to ensure adequate food supply all year round to avoid the "food panic" that leads to inflation.

He maintained that the economic strides made since constitutional rule demonstrates that democracy promotes economic performance rather than hinder it.

Dr Abbey, who was represented by Dr Charles Jebuni, a research fellow at CEPA, said the banks must depart from the habit of refusing loans to local industries on the basis of poor performance and rather help them to grow to strengthen the country's manufacturing capacity.

He decried situations whereby some of the government's expenditure do not receive parliamentary approval and where some foreign grants are made directly to government agencies without passing through the national treasury.

This, he said, makes the Controller and Accountant-General's Department unable to provide government with independent estimates for budgetary planning.

Dr Abbey lashed at the systematic reduction in subsidies to the education and health sectors which, he said, held dire consequences for the development of the country's human resources needed to meet the technological demands of the new millennium.

"Comparative advantage based on natural resource exports is no longer needed. Human resource development must be the fundamental base of development in the 21st century."

He said the trend of global financial flows brought about by an improved information technology network requires that African governments foster bloc markets rather than going it alone.