Vice-President Mahamudu Bawumia, Chairman, Economic Management Team: Interview

Interview: Mahamudu Bawumia

What steps has the government taken to foster a more business-friendly environment?

MAHAMUDU BAWUMIA: We need the private sector to play a greater role to counter the over-reliance on the government. This means that we had to tackle some of the major challenges businesses faced, starting with restoring macroeconomic stability – something often taken for granted. We took the bull by the horns and implemented fiscal consolidation, reducing the deficit from 9.3% of GDP to under 5% of GDP. We have had relatively robust growth as a result. Inflation is down to single digits and on a downward trend, interest rates are lower as well, and public sector finances have improved. This has been key to restoring confidence in the economy.

Another aspect of the confidence-building process had to do with the port system, where increased digitalisation has helped reduce clearance times from days to hours. We evaluated the process flow and eliminated many inefficient steps. As a result, the cost of doing business in the ports went down significantly. The new Port of Tema also became operational in June 2019 following a $1bn construction project, with a completely automated process integrated into a paperless flow.

In order to improve the ease of doing business, we lifted some of the tax burden on the private sector. In our first budget we abolished 17 taxes, including taxes on real estate and value-added tax on airline sales that were inhibiting growth. We also improved the process of registering and securing a business operating licence at the Registrar General’s Department by automating and simplifying it; the same process of digitalisation and simplification is under way in other public sectors.

In which ways can you ensure that economic growth in Ghana is both rapid and inclusive?

BAWUMIA: We want to transform the economy, which requires greater inclusion of the population. Ultimately, what develops an economy is proficient human capital and a strong knowledge base, rather than gold or oil in the ground. Through the Free Senior High School programme we have enrolled over 300,000 students who would not have had access to education otherwise, thereby not only providing them with opportunities, but also relieving the country of a potential social burden.

Another inclusion initiative was the partial decentralisation of the capital budget. We have set aside a minimum share of the budget to be distributed to each constituency in the country for basic infrastructure, with 20% of the capital budget decided at the local level.

Lastly, we have made considerable progress in financial inclusion through a three-pronged digital agenda resting on a national biometric ID, a digital address system and mobile money interoperability. We are the first country in Africa to link mobile wallets to bank accounts. This allows anyone who either has a mobile money wallet or a bank account to receive payments from government bank accounts, and to pay government taxes and fees for services, such as passport and driving licence renewal. Automating and digitising these services not only has improved inclusion, but it has also contributed to reducing corruption and bribery.

How can the African Continental Free Trade Agreement (AfCFTA) provide opportunities to Ghana?

BAWUMIA: Intra-African trade is still very limited. Weak inland transport links are an obstacle, and trade barriers act as another big deterrent to trade within the continent. However, there is room for improvement. As the host of the Secretariat for the AfCFTA, Ghana will be at the forefront of advocacy for trade integration and the removal of trade barriers. This will send a positive message to investors: if you are coming to Africa, Ghana should be your first stop. By establishing a base in our country, you can access the rest of the continental market. Auto industry players including Volkswagen, Toyota and Nissan have begun expanding operations in Ghana, with an eye on the rest of the African market. We expect to see this trend across a range of sectors.