Business News of Friday, 1 February 2013

Source: B&FT

2013 Budget: Employers want more spending on infrastructure

Chief Executive Officer of the Ghana Employers’ Association (GEA) Alex Frimpong says employers want to see accelerated infrastructure development in this year’s budget statement, especially regarding the road sector, to open up business.

He decried the current situation wherein businesses are concentrated in the major cities of Accra, Kumasi and Takoradi, saying the construction of new roads would open up the country and allow businesses to expand to other parts of the country.

Ghana’s current infrastructure spending is said to be inadequate to meet the demands of a middle-income economy, and the World Bank has said additional spending of US$1.1billion is required each year.

While new roads, bridges, rail-lines and ports have to be constructed, existing infrastructure needs to be upgraded to make economic activities more efficient, according to the Bank.

Mr. Frimpong cited the Tarkwa-Kumasi road as a classical example of infrastructure that is under enormous pressure, saying that it was not the original intention to cart bauxite and other minerals on the main road. He noted that at the present rate of use, it is certain the road will start experiencing deterioration in the not- too-distant future.

He said there is an urgent need to overhaul the entire rail network to facilitate the transportation of goods and people, ease the pressure on the country’s road network, and offer a cheaper means of transportation.

He said the Accra-Kumasi rail-line needs to be revamped to reduce the pressure on the roads linking the two cities.

The government has laid out an infrastructure programme to be financed with the US$3billion China Development Bank (CDB) facility, part of which has been approved for construction of the natural gas pipeline project in the Western Region.

The programme includes investments in rail infrastructure, ports-refurbishment, roads, and irrigation systems.

A source of worry for employers, according to Mr. Frimpong, is the ease with which counterfeit and sub-standard goods pass through Ghana’s porous borders and find their way into the market. “The situation presents a challenge to the capacity of local competitors, and has the tendency to exacerbate the unemployment situation -- which is not good for the government,” he said.

He also expressed concern about the skills deficit that has hit the labour market, and asked for more funds to be allotted by the government to the training and development of skills in the vocations -- so that employers will not have to spend too much on training the people they hire.

On the issue of employers’ expectations from negotiations on the national minimum wage, Mr. Frimpong said the talks are on-going and he would not want to pre-empt the discussions.