Ghana’s Vice President, Dr Mahamudu Bawumia has delivered the keynote address of the fifth edition of Ghana Economic Outlook and Business Strategy Conference (EOBS) with a call on the private sector to partner the government to formalise the Ghanaian economy.
He told the business leaders at the conference opened in Accra today that: “Fundamentally, this government wants to formalize this economy with financial inclusion, national identification and property addressing system as the three pillars we want to achieve in 2017″.
Estimates are that the informal economy in the West African second largest economy is worth over US$10 billion a year. Over 80 per cent of the workforce is part of the informal economy, and that runs the gamut from people selling vegetables at the side of the road to major corporations like mobile phone companies that do all of their business through informal kiosks that are stands at the side of the road.
The Ghana Statistical Service estimates that 86.1 per cent of all employment is found in the informal economy. 90.9 per cent of women and 81 per cent of men are working in the country’s uncontrolled, regulated or standardised informal sector.
The informal economy in Ghana is about two-thirds the size of its formal economy. It is largely composed of people distributing goods from other countries — rather than producing their own marketable goods.
But Dr Bawumia is confident that the government would be able to change this informal economy to a formalise one.
He maintained: “Mobile Money Interoperability cannot be forced on private companies, we need to challenge and engage the Telcos to work together to develop a system. And I want to encourage Banks and Telcos to do it this year.
Dr Bawumia explained the EOBS 2017, whose theme is ‘Unlocking Ghana’s Economic Potential with Mobile Money and Payment System’ is apt and timely. According to him, the issue of high interest has directed effect on financial inclusion in the country.
“If you have more savings in the economy, all things being equal interest rate will go down. This is not rocket science”, Dr Bawuma stated.
The Second Deputy Governor of the Bank of Ghana (BoG), Dr Johnson Asiamah added: “Digital payments offer great potential for financial inclusion, elimination of payroll fraud, improvement in the monetary policy transmission mechanisms and efficiency in payments”.
However, he observed: “Digital payments can only be an enabler of inclusive growth when the right regulatory environment is in place”.
“It is on account of this that Bank is continuously retooling the regulatory environment to incentivise stakeholders to innovate”.
Dr Asiamah was optimistic that the draft Payment Systems and Service Bill when passed into law will scale up financial inclusion.
He was quick to add: “The law complemented by RegTech and regulatory sandbox will also provide the right conditions for innovation in digital payments”.
In welcome address, Kwadwo Asumaning, Chairman of the African Business Media Limited (ABM), publishers of the multiple-award winning Ghana Business & Finance magazine(GB&F), organizers of the event said the global movement towards a cashless world seems to be gathering amazing speed since the discovery of the internet.
“That, electronic payment and its associated fast and convenient money transfer have become regular features of our modern day lifestyle and the way of doing business”, he stressed.
“We considered the acceleration of the perfecting of this modern day transaction system a reality that should be prioritized in our national economic and business growth agenda, hence we have presented it for us to deliberate on”, Mr Asumaning stated.
The EOBS is organised by the ABM, publishers of the magazine with partners and reputable corporate sponsors is a must-attend event for both local and international businesses.
The corporate partners this year include the Ministry of Trade and Industry, Ghana Interbank Payment and Settlement System (GhIPSS), Ghana Chamber of Telecommunications, Ghana Association of Bankers, Association of Ghanaian Industries, PEF, Margins Group, Tigo Ghana, among others.
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