Economic Policies

 

A.  NATIONAL ECONOMY

Taking economic growth and development as our central task is vital to invigorating our nation and is the fundamental requirement for lasting stability of the nation.

First, we take public ownership as the foundation of our economic philosophy. It is the basic force of the state that is used to guide and promote economic and social development. It is also a major guarantor for realizing the fundamental interests and the common prosperity of the majority of the people.

The state will retain indirect control in directing the non-state economy through the financial system, which will lend according to state priorities. The state sector will be strengthened by the consolidation of state enterprises into large industrial champions with the goal of consolidating effort and creating internationally competitive national industries. The state sector will focus on the 'commanding heights' of the economy with a growing private sector engaged primarily in commodity production and light industry.

The country will have strong regulatory power over private businesses. This control will be designed to help the country grow in a manner the government views as most beneficial to the majority of our citizens. The CPP believes that a country that does not produce and export to balance its external trade will always experience pressure on its local currency.

The CPP identities under-production and unemployment as the greatest impediments to economic prosperity. Inflation is the cause as well as the effect of economic under performance.

Unlike the NDC and NPP that see nothing wrong with the development of an aid dependent economy, the CPP from the perspective of our Nkrumaist philosophy of self-determination is committed to achieving economic independence:

An economy that is led by the state and controlled by the state for the benefit of the broad masses of workers, students and the ordinary individual on the street.

An economy that is internally sustainable, an economy that will provide full employment, develop our human capabilities and the productive resources of our nation to transform our society.

This will be the fulfilment of our responsibility to achieve political and economic freedom so as to regain our dignity and self-respect and mitigate impoverishment that the NDC

and the NPP have imposed on our economic and social development.

Our priority is to restore macroeconomic stability by increasing production, manufacturing and exports and not by encouraging imports and distribution.

This means making further efforts toward fiscal adjustment by taking concerted action at fiscal consolidation that is tilted towards supporting local industry and exports in order to balance our external trade.

We will not seek to control inflation like imposed by recent government of NDC and NPP where inflation is controlled by keeping money out of the pockets of citizens but rather controlled by the increasing production and export.

 

We will invest intelligently in new factories that will substitute for imports and provide competitive products for our exports.

 

We will invest in cocoa plantations. These plantations will serve as model farms and will showcase best practice for other farmers. We will also invest heavily in tropical almond, bamboo, sheanuts, mango and cashew plantations to form the foundation of our

agro industry for export markets and to reduce dependency on cocoa.

These structural reforms will be necessary for improving the resilience of the economy particularly its ability to withstand international commodity shocks.

The shortfalls in electricity supply that have led to what is popularly called 'dumsor' in the last few years has damaged the private sector extensively. We will resolve this condition by encouraging and supporting value for money investment to increase production and improve operations.

Unlike the NDC and NPP governments we will meet our financial obligations to the public energy institutions to help them deliver on their mandate.

In order to manage the economy well, the CPP will do the following:

 

2.1 National  Development Planning

We will support the National Development Planning Commission (NDPC) to ensure effective national development planning. To this end, the CPP has been supportive of the 40-year development plan.

2.2 Macroeconomic  Policies

We will take whatever measures that are necessary to maintain macroeconomic stability by:

2.2.1 Monetary Policy:

We will work with the Bank of Ghana (BoG) to strengthen Ghana's monetary policy and to continue reforms in the banking and

financial sector, including improved oversight of banking and financial institutions and the passage and implementation of laws to protect the welfare of consumer.

  1. Consumer credit: We shall work with the BoG to induce our banks to bring down interest rates to reasonable and realistic levels for workers in both the formal and informal sectors.
  2. Long-term funds for industry: We shall accelerate insurance reforms as part of
  3. a broader strategy to make available long-term funds for Ghanaian businesses.
  4. Lowering interest rates: While interest rates have come down somewhat over the past few years, they remain very high, compared to other countries.
  5. Single-digit inflation: The failure of the Central Bank to attain single digit inflation over the years shows that “inflation targeting” is inappropriate for Ghana.
  6. The CPP will not practice inflation targeting. We shall focus instead on economic growth and job creation and allow the inflation rate to find its own level in line with the pace of overall economic activity.
  7. State-owned banks/development banks: We will review the mandate of the state-owned banks to ensure that we have development banks again. We shall reform state-owned banks,including by listing them on the Ghana Stock Exchange, to deepen their capacity to finance national development and make them internationally competitive. Where possible, we shall encourage them to venture into foreign markets, just as foreign banks are venturing into the Ghanaian banking sector.
  8. Rural banks: We shall work with the central bank to strengthen the capacity of rural banks to finance rural agricultural and non-agricultural activities. Among other things, this calls for increased governance and transparency in the management and supervision of rural banks.

 

  1. Fiscal Policy:

Fiscal policy involves taxation, spending of the revenue from taxation, and management of the publicdebt. The CPP will institute a programme to improve the overall public financial management of government revenue from all sources. It is important that we manage both oil and non-oil revenue

efficiently and transparently to create public confidence in the managers of the economy.

  1. An effcient and equitable tax regime: Despite many years of reform, the tax system in Ghana remains susceptible to abuse, especially by large companies which evade taxes through many means. This situation is compounded

by big tax concessions often given to foreign investors without similar concessions to Ghanaian businesses. All these practices deprive the state of billions of Ghana Cedis every year, more than what we receive in foreign aid. By plugging these loopholes, we can reduce our dependence on donors while we improve our ability to finance our development and grow our economy.

2.Improving public expenditure.

Hard as it is to believe, nobody knows exactly how many people are on government's payroll at any given time. The result has been massive waste and theft in public expenditure. An estimated 25.0 per cent of salary expenditures and 50.0 percent of non-salary expenditures in the education sector alone do not reach their intended beneficiaries. The CPP will first undertake a comprehensive census of the public sector and introduce systems and benchmarks to deal with this problem.  The National Identification System which we intend to implement will be greatly helpful in this regard.

3.Managing petroleum revenue: CPP will repeal the petroleum bill that adopts the royalty tax system (Re- shaped into what is called the Ghana hybrid system) as the mechanism for benefitting from her our oil resources. Instead, CPP shall adopt the Production Sharing Formula for the distribution of oil revenues and benefits. If Ghana had adopted this formula for the recent oil find, she would have earned over US $9 BILLION from her oil resources between 2010/2015, representing 60% of total production revenue of over US $ 15 billion. Compare this to the paltry US $ 3 billion earned over the same period ( under the royalty tax system) representing 19.4% of total production revenue. We will manage the revenue from Ghana's petroleum sector strictly in accordance with the Petroleum Revenue Management Act 2011 (Act 815).
  1. Debt policy and management: Our debt policy will be driven by our development needs and our capacity to repay through high economic growth and improved tax administration. Our debt policy will not be driven by donor benchmarks that ignore our development needs and undermine our ability to finance our development. We shall also improve our capacity for debt analysis and management, a deficiency which impedes our ability to raise funds both locally and externally to finance our development.
  2. Transparency and Accountability: We shall require timely and consistent monthly and quarterly publication of public finances by national and local government tax agencies.

2.1.1 Exchange Rate Policy:

A CPP government will encourage and collaborate with the BoG to keep the value of the Cedi relatively stable by ensuring good balance of payment performance and intervening in the foreign exchange market when necessary.

2.2 Agricultural and Rural Transformation Policies

The NDC government's attitude towards agriculture has been one of neglect which has resulted in continuing decline.

The CPP's agricultural policy will focus on attaining food security and nutrition for the nation,income security for farmers and fishermen, and self-sufficiency in industrial sectors that depend on forest and agricultural products for their work.

The emphasis will be on the use of science and bio-technology to mechanize and modernize agriculture. We will of course have nothing to do with GMO's.

Specific policy initiatives will include the following:

2.3.1 Food, Fisheries and Livestock Sub-Sectors:

The main goals shall be to:

1.     Facilitate easy acquisition and utilization of land for agricultural purposes, including fish farming and ranching.

2. It has been observed that with cheap almond nut cake protein, we could transform the entire Volta lake area into the largest fish pond in the world.

  1. We shall set up the first tropical almond research institute with the view of advancing research in this area which has beneficial forward and backward linkages.
  1. Increase state resource allocation, such as subsidised inputs, technical assistance and price support to farmers and fishermen, etc.
  2. Increase support for the Extension Service to provide services for the farmers.
  3. Increase resources to various agricultural colleges and research institutes, such as the Food Research Institute, the Crop Research Institute and Soil Research Institute to enhance their support activities for the sector.
  4. Encourage and resource the University of Development Studies (UDS) to expand specialist studies of rural economies and societies in order to shape public policy.
  5. Expand agricultural insurance schemes as part of basic broad programme to improve farmers' access to credit.
  6. Establish a Co-operative Investment Bank. Development agencies and local authorities will be empowered to support and to help establish co- operatives.
  7. Restructure the agricultural sector to include a Food Distribution Board and Agricultural Marketing Agency. The Ministry of Food and Agriculture (MoFA) will continue to support production through extension and technical services.
  1. Support the development and strengthening of Farmer-Based Organisations (FBOs) as well as cooperatives to give farmers easy access to affordable credit and offer them other forms of capacity-building assistance, such as subsidised literacy and numeracy classes as well as basic business management skills.
  2. Develop, in collaboration with farmers, agricultural infrastructure, such as irrigation systems; fish preservation and processing facilities; silos; as well as standard infrastructure like electricity, telephones, water, roads, and affordable housing.
  3. Develop a National Nutrition Policy based on common foodstuffs in Ghana as a way of promoting healthy lifestyles while raising the incomes of our farmers and fishermen. The Food Research Institute will be tasked to improve food preparation methods to make preparation of Ghanaian cuisine less time-consuming.
  4. Develop a Farmers and Fishermen Income Security Scheme (FFISSH) to protect them against old age poverty, especially in the rural and coastal areas.
  5. Adopt a fisheries policy to guide the development of sector.
16.Increase the production of corn, soya-bean, ground nuts, millet and sorghum to substitute for hops barley and wheat in beer, flour, edible oil and poultry production. There is a potential savings of about $600m in imports.
  1. Promote the production of roots and tubers to compete with the consumption of imported rice in the food sector.
  2. Increase the cultivation of industrial sugar cane for the production of sugar, bio fuel and food grade ethanol. Current import expenditure on this item, which exceeds $200m, will be retained in the domestic economy for the benefit of our farmers.

We shall encourage the growing of bast-fibre to produce jute sacks saving 300 million dollars otherwise paid other countries.