4.7 per cent GDP target too modest

Ken Ofori-Atta, Executive Chairman of Databank Financial Services Limited, on Tuesday said that the government’s target of 4.7 per cent growth in Gross Domestic Product (GDP) appears modest if the nation wants to achieve a middle-income status.

He also noted that the government’s target of achieving an import cover of 2.3 months was not enough. Ofori-Atta made these comments at a seminar organised by Databank on the 2003 budget statement in Accra. He noted that the government should find a lasting solution to the issue of oil financing adding, “as a nation, this has been our Achilles heels.”

The Executive Chairman lauded the government’s decision to vote a portion of the finds from the National Reconstruction Levy to support venture capital financing. Last year, the government accrued ?200bn from the reconstruction levy. He noted that a portion of such figure by way of private equity financing would put the private sector in a better shape.

Nevertheless, Mr Ofori-Atta urged the government to be a little more bold with regard to issues affecting the private sector.

Ebenezer Essoka, managing director of Standard Chartered Bank, Ghana Limited, noted that the biggest challenge for the government would be the implementation of the budget. He described it as a strong budget, with a short-term gain for long-team gain, and suggested that the government should set up a private fund manager to manage the funds that would accrue from the National Reconstruction Levy and other levies.

Essoka noted that it was essential that the government freed some of the funds it was holding. On the fund manager, he said that it could be an institution and not necessarily a commercial bank.

He also said that in order to access capital on the international capital market, it was necessary that the nation achieved a sovereign credit rating. Dr Joe Amoako Tuffuor of the Ministry of Finance described the budget as focused.