The Chief Executive Officer of Dalex Finance, Kenneth Kwamina Thompson, has urged government to create more space for investment even as the country reels from an economic downturn.
According to him, the impact of the current economic crisis has been devastating on the private sector which if not solved would further slowdown the country’s economic recovery process subsequently exacerbating th country’s social issues.
He explained that with interest rates expected to remain high for the foreseeable future, funding for private sector businesses is going to be tough leading to job losses and stunted growths of businesses in the country.
He said, creating space for investment would allow the private sector have some breathing space to be able to grow and expand and consequently quicken the country’s recovery rate.
Speaking on JoyNews’ PM Express Business Edition, he said, “So things are going to be tough, interest rates are going to be high, what we must try and do is to leave some space for investment because suddenly, the headman has no more money to spend. So if there are no projects, think of all the people that work on the projects.
“Assuming they’re even tarring the road in front of your office, think of the number of people that work on the project as day labourers; think of the people that supply fuel; think of the people whose machines are rented; think of the people that sell food to these people; then those people also have children they take to school, they support the health service.
“So this slowdown of the economic activity has a huge impact on the private sector because suddenly there’re going to be job losses, the businesses are going to be weak, and it’s going to take time for us to recover. So my hope is that the government will be mindful of creating space for investment.”
He noted that it is up to government to find other ways of raising revenue to reinvest into the economy aside from the IMF loan it is currently negotiating.
Kenneth Thompson suggested that government finds ways to collect more taxes and to further cut down on expenditure.
“Well, we’ve got to find a way to collect more tax. You know I don’t mind paying the GRA staff, give them 15% bonus, anything they collect give them 15%, and if any of you is caught stealing, deal with them. But we have to do different things because we need to create an environment where we can still invest.
“Because this is a country with a high unemployment rate, we have large numbers of young people, and if we’re not able to create employment, if we’re not able to keep those people in jobs we have huge social issues. So no matter what, we’ve got to find a way to get money to invest. But it’s going to be tight,” he said.
“And let’s not think that the IMF is coming to solve our problems. IMF will not solve our problems, they never said they’ll solve our problems. But the private sector is weak, the private sector is the one that can create jobs. We need to do something different. We can’t afford not to invest in the economy, we can’t.
“Well so take your income, take your expenditure, take an axe to the expenditure, cut. You’ve got to cut. All these unprofitable SOEs, I mean sell them off in a transparent manner and invest, because unless we do that we are in trouble. We have to continue investing,” he added.