2016 NPP Manifesto: What the NPP will do under Economy, Energy and Trade

The New Patriotic Party (NPP) launched its 2016 manifesto at the International Trade Fair Centre on Sunday, October 8 with thousands of party supporters and functionaries in attendance.

The 192-page document which contains messages from the Party's 2016 Flagbearer, Nana Akufo-Addo and the National Chairman Freddie Blay has in detail the party's intended policies if elected in December.

The first three chapters, A Strong Economy Matters, Trade and Industry and Energy and Petroleum have been captured in the manifesto series below.

Chapter 1
A Strong Economy Matters
A strong economy creates opportunities and inspires more people to start new businesses. In much the same way, a strong economy encourages existing businesses to make new investments, to grow, and expand.

More and well-paying jobs are created, the private sector hires more people, and citizens prosper. Public sector-driven job creation interventions and initiatives also require a strong economy.

Social services such as the National Health Insurance Scheme, free quality basic schools across every part of the country, the School Feeding Programme, good roads and a wider and cheaper transport network, affordable housing, stable and affordable electric power: all of these require a strong economy.

Supported by a good business environment, a strong economy is defined by its stability, its growth rate, the levels and number of taxes, the extent of value-addition, the creation of wealth, and the prosperity of citizens.

Having jobs and livelihoods provide security for individuals, families and communities as a whole. When people prosper, the peace is largely secured.

Unfortunately, the economy is broken: there is widespread hardship and suffering, resulting in insecurity at all levels.

This is because John Mahama has been a bad steward of the economy and our finances. Seven out of every ten Ghanaians say John Mahama has failed on the economy, and is leading the country in the wrong direction.

I. A RECORD OF PERFORMANCE
Under the 8 years of the NPP government, from 2001 to 2008, taxes and loans amounted to GH¢20 billion. In contrast, taxes, oil revenues, and loans over the 8-year period of 2009-2016 under the NDC would amount to some GH¢248 billion. The NDC government would have had, in eight years, more than 12 times the nominal resources that the NPP had (Figure 1).have had in eight years, more than 12 times the nominal resources that the Kufuor-led NPP had (Figure 1).

The question that Ghanaians should be asking is; how has the management of the huge resources at the disposal of the Mahama-led NDC government impacted on the economy?

Real Sector Developments
i. between December 2000 and December 2008, without oil, economic growth increased from 3.7% to 9.1%. After declining to 4.8% in 2009, real GDP growth increased to 7.7% in 2010 and 14% in 2011 following the onset of oil production. Since 2011 however, real GDP growth has declined steadily and drastically to 3.9% in 2015 (Figure 2), basically the growth rate Ghana attained in the year 2000 which was 3.7%. President Mahama’s tenure of office has been characterized by declining economic growth

Figure 1: Total Tax Revenue and Loans Billions (GHC)

The question that Ghanaians should be asking is; how has the management of the huge resources at the disposal of the Mahama-led NDC government impacted on the economy and on their lives?

1. Between December 2000 and December 2008, without oil, economic growth increased from 3.7% to 9.1%. After declining to 4.8% in 2009, real GDP growth increased to 7.7% in 2010 and 14% in 2011, following the onset of oil production.

Since 2011, however, real GDP growth has declined steadily and drastically to 3.9% in 2015 (Figure 2) and projected to end this year at 3.3%, the lowest since 1994. President Mahama’s tenure of office has been characterized by declining economic growth

2. Between 2000 and 2008, the size of the country’s economy increased from some 5.1 billion to 28.5 billion, a 459% increase in eight years (Figure 3). ven in the face of a global economic and financial crisis in 20078 (with oil prices reaching a record high of 147 barrel), economic growth in 2008 rose to 9.1%.

However, Ghana’s GDP, notwithstanding the discovery of oil, has only increased from 28.5 billion in 2008 to a projected 40 billion in 2016 (a 40% increase in eight years). However, between 2012 and 2016 i.e. during ohn Mahama’s tenure as president, the economy, in dollar terms, shrunk by 5%.

2. i. between 2000 and 2008 (following the rebasing of the GDP), the size of the country’s economy increased from some $5.1 billion to $28.5 billion, a 459% increase in eight years (Figure 3). Even in the face of a global economic and financial crisis in 2007/8 (with oil prices rising to a record high of $147/barrel), economic growth in 2008 was 9.1%. However, Ghana’s GDP, notwithstanding the discovery of oil, has only increased from $28.5 billion in 2008 to a projected $40 billion in 2016 (a 40% increase in eight years). In fact, between 2012 and 2016, i.e. during John Mahama’s tenure as president, the economy, in dollar terms, shrunk by 5%

iii. under the NDC, GDP per capita has recorded a growth of 17% (from 1,266 in 2008 to a proected 1,481 in 2016) with oil revenue. Under John Mahama’s tenure as president (2012-2016), GDP per capita has declined by 12%. Under NPP on the other hand, GDP per capita recorded a growth of 187% in 8 years (from 440 to 1,266) without oil revenues. While the NPP increased per capita incomes by 826 during its term, the NDC, with twelve times more resources, has increased per capita incomes by only 215 (Figure 4). With twelve times fewer resources, the NPP increased GDP per capita by some four times more than the NDC. This is essentially the difference between competent economic management and incompetent economic management. t also tells us that fundamentally, the country’s problem is not about resources. Our problem is the efficient and honest management of our resources

3. under the NDC, GDP per capita has recorded a growth of 17% (from $1,266 in 2008 to a projected $1,481 in 2016) with oil revenues. Under John Mahama’s tenure as president (2012-2016), GDP per capita has declined by 12%. Under NPP on the other hand, GDP per capita recorded a growth of 187% in 8 years (from $440 to $1,266) without oil revenues. While the NPP increased per capita incomes by $826 during its term, the NDC, with twelve times more resources, has increased per capita incomes by only $215 (Figure 4).

With twelve times fewer resources, the NPP increased GDP per capita by some four times more than the NDC. This is essentially the difference between competent economic management and incompetent economic management. It also tells us that fundamentally, the country’s problem is not about resources. Our problem is the mismanagement, incompetent and corrupt use of our resources

iv. in dollar terms, under the NDC, the minimum wage declined from 2.12 to 2.02 by 2016 (i.e. by 4.6%). Between 2012 and 2016 (during the tenure of President Mahama) the minimum wage in dollar terms declined by 23.6% (Figure 5). n comparison, the NPP increased the minimum wage from the equivalent of 0.62 in 2000 to 2.12 in 2008 (i.e. by 244%)

Figure 5: Minimum Wage (US$) Growth
4. In dollar terms, under the NDC, the minimum wage declined from $2.12 to $2.02 by 2016 (i.e. by 4.6%). Between 2012 and 2016 (during the tenure of President Mahama), the minimum wage in dollar terms declined by 23.6%! (Figure 5). In comparison, the NPP increased the minimum wage from the equivalent of $0.62 in 2000 to $2.12 in 2008 (i.e. by 244%)

5. Furthermore, the data shows that, as national income increased under President John Agyekum Kufuor in the 2001-2008 period, people at the bottom of the income scale became better off. In the 2009-2016 period, however, as income increased, those at the bottom of the income scale have become worse off. While income inequality, as measured by the change in minimum wage relative to the change in national income, improved by 1.8% during the 2001 to 2008 period, it has seen a major decline since 2008, with the worst decline (-5%) occurring during John Mahama’s tenure as President (Figure 6)

6. According to the United Nations Human Development Index (a measure of progress in income, literacy and life expectancy), for the period 2000-2014, Ghana made the most progress in human development between 2000 and 2010. The average growth rates of Ghana’s UNDP Human Development Index has declined from 1.33 (between 2000-2010) to 1.13 (between 2010-2014)

7. The country’s food import bill has increased dramatically from US$600 million in 2008 to $2.1 billion in 2015 (Figure 7). Rice imports, for example, has risen by 52% from 395,400 metric tonnes in 2008 to over 600,000 metric tonnes in 2015, for example, has risen by 52% from 395,400 metric tonnes in 2008 to over 600,000 metric tonnes in 2015

Figure 7: Food Import Bill (US$ millions)
viii. The agricultural extension service is on its knees with inadequate personnel and resources. There has been a freeze on the hiring of tension officers under the Mahama-led NDC government i. the mass cocoa spraying exercise introduced by the NPP government has collapsed and cocoa production has subsequently declined. Under NPP, Cocoa production more than doubled in just two years, from 341,000 metric tonnes in the 20012002 season to 737,000 metric tonnes by 20032004; and then to one million metric tonnes in 20102011. t has since declined to less than 750,000 metric tonnes in the 20142015 season . for primarily financial reasons, the economy has had to endure five years of power outages (DMS), with deeply debilitating consequences for the economy. The government is financially strapped and unable to meet its obligations to suppliers of Gas from Nigeria, for example

i. electricity prices, thanks to high taxes and corrupt procurement of power generation, are now amongst the highest in the world

8. the agricultural extension service is on its knees with inadequate personnel and resources. There has been a freeze on the hiring of Extension Officers under the Mahama government

9. the mass cocoa spraying exercise, introduced by the NPP government, has collapsed and cocoa production has subsequently declined. Under NPP, cocoa production more than doubled in just two years, from 341,000 metric tonnes in the 2001/2002 season to 737,000 metric tonnes by 2003/2004; and then to one million metric tonnes in 2010/2011. It has since declined to less than 750,000 metric tonnes in the 2014/2015 season

10. for primarily financial reasons, the economy has had to endure five years of power outages (DUMSOR), with deeply debilitating consequences for the economy. The government is financially strapped and unable to meet its obligations to suppliers of gas from Nigeria, for example

11. electricity tariffs, thanks to high taxes and corrupt procurement of power generation, are now amongst the highest in the world

12. in the 8 years of the NPP (2001-2008), the average fiscal deficit as a percentage of GDP was 4.4%. In the last seven years (2009- 2015), the fiscal deficit has averaged 8.1%, with three successive years of double-digit deficits between 2012-2014 (the first time in our history)

13. the total debt of the country, after 51 years of independence, and at the time NPP left office in 2008, was GH¢9.5 billion. Under NDC, in just seven years, it has risen to GH¢100 billion in 2015 (moving the debt to GDP ratio from 32% in 2008 to over 72% in 2015)

14. according to the Managing Director of the International Monetary Fund (IMF), most of the country’s borrowing under the Mahama government has been spent on consumption, rather than investment. In fact, only 20% of total government borrowing between 2009 and 2015 has been spent on infrastructure investment

15. at the end of 2008, the country’s total annual interest payments amounted to GH¢680 million, but this has increased to GH¢10.5 billion in 2016. Six times the country’s oil revenue is now needed to pay one year’s interest on the debt

16. after 8 years of mismanagement, the banking system has been pushed to dangerously fragile levels. Rising state-owned enterprise (SOE) debts, debts owed by government to the bulk- oil distribution companies (BDCs), and inadequate supervision of microfinance companies have escalated the level of not-performing loans (NPLs) to as high as 19.3% in May 2016

17. lending rates of financial institutions have increased from 27% in 2008 to 34% in 2016. The days when banks chased customers with loans have disappeared. Today, banks prefer to lend to government, and not to the private sector

18. the exchange rate, which stood at GH¢1.20 to US$1 at the end of 2008, has dramatically depreciated to GH¢4.0 to US$1 today. Over the period of NDC management of the country’s economy, the cedi has been one of the worst performing currencies in the world

19. teacher training allowances have been cancelled

20. nursing training allowances have been cancelled

21. nurses and health assistants are not being posted after completion of their courses

22. drivers and transport operators have experienced a dramatic rise in the costs of insurance, spare parts, license fees, DVLA charges and fuel

23. taxes on businesses have increased dramatically and new taxes have been introduced. For example, increases in capital gains tax (from 10% to 25%), withholding tax (from 15% to 20%) and the introduction of the Energy Levy (10%), VAT on Electricity (17.5%),

VAT on Financial Services (17.5%), and Special Import Levy. Taxes have also been introduced on ambulances and bicycles

24. government expenditure on infrastructure has declined considerably from an average of 11.5% GDP between 2001 and 2008 to 5.7% of GDP between 2009 and 2015. The 2016 expenditure on infrastructure is even lower at 4.2% of GDP in 2016

25. economic mismanagement has resulted in the country turning to the IMF for a bailout and to restore policy credibility. However, the IMF programme has not delivered

26. the country’s sovereign credit rating has been downgraded from B+ (with a positive outlook), without oil, under NPP in 2008 to B- (with a stable outlook) in 2016, with oil, under NDC. This has resulted in government having to borrow at much higher cost

27. the NHIS has virtually collapsed. The dreaded cash and carry system has returned, and

28. the free maternal care system has also collapsed.

II. IMPACT OF NDC’S MISMANAGEMENT, INCOMPETENCE AND CORRUPTION ON THE WELFARE OF GHANAIANS

For a majority of Ghanaians, the results of the Mahama-led NDC government’s mismanagement of the economy has been a worsening of their living conditions and economic circumstances. Most people have looked on in dismay at the corruption of the Mahama government through schemes such as judgment debts, SADA, GYEEDA, Smartyy’s bus branding, emergency power plants like KARPOWER and AMERI, and sole sourcing. For the vast majority of Ghanaians, the toxic mixture of the Mahama government’s mismanagement, incompetence, and corruption over the last eight years has resulted in an explosion of suffering in the country:

• teachers are suffering
• teacher trainees are suffering
• nurses are suffering
• nursing trainees are suffering
• patients are suffering
• students are suffering
• traders are suffering
• pensioners are suffering
• drivers are suffering
• contractors are suffering
• civil servants are suffering
• farmers are suffering
• fishermen are suffering
• industries are suffering
• artisans are suffering
• kayayei are suffering
• men are suffering
• women are suffering
• children are crying
• Ghanaians are suffering
The discovery of oil has not made any difference in the lives of most Ghanaians, except for a small group of friends and family around the President. The country is clearly not working. The Mahama-led NDC government is not working and has no clue about how to get our country to work.

III. NPP’S VISION FOR GHANA
Our overall vision for Ghana is the development of an optimistic, self- confident and prosperous nation, through the creative exploitation of our human and natural resources, operating within a democratic, open and fair society in which mutual trust and economic opportunities exist for all.

We will build a democratic, open and fair society with the following characteristics:

i. a prosperous population with a high quality of life

ii. a stable, peaceful and firmly united nation
iii. an efficient machinery of good governance with strong institutions

iv. a well-educated population that strives for excellence, and

v. a competitive economy that is capable of producing sustainable growth, jobs and shared benefits for all.

IV. NPP’S ECONOMIC POLICY OBJECTIVES
On the economy, our goal is simple: to build the most business-friendly and people-friendly economy in Africa, which will create jobs and prosperity for all Ghanaians.

We will ensure that growth is socially responsible, diversified, spread geographically, comes from genuine value addition, environmentally sensitive and fair to all participants in the economy, including labour.

To accomplish this, we will focus on growing the economy and creating wealth and prosperity for the vast majority of Ghanaians through private sector empowerment.

Our goal, inter alia, is to achieve double-digit GDP growth annually for the next four years (under the Kufuor-led NPP government the economy attained a GDP growth rate of 9.1% in 2008 without oil). We will reduce the cost of doing business, maintain fiscal discipline, reduce government borrowing and reduce interest rates to spur private sector investment.

Our economic programme will enhance agricultural production and productivity, along with a transformation of the economy through value- addition to our raw materials in a process of rapid industrialization.

There will be an increase in infrastructure expenditure as a percentage of GDP to eliminate critical bottlenecks in the areas of roads, rail, aviation, water, sanitation, and energy, and we will distribute infrastructure fairly and comprehensively across all parts of the country.

The NPP will invest in our people through the provision of quality education and healthcare, as well as affordable housing. The role of government would be one of providing an enabling environment for the private sector to thrive, as well as putting in place social policies to protect the disadvantaged and vulnerable in society.

In particular, the NPP will implement policies to invest in rural, coastal, zongo and inner city communities.

We understand that solid and consistent implementation of structural reforms and policies is ultimately the key to successful job creation and therefore NPP will implement prudent and sustainable economic policies.

Our government will secure the peace and stability of our nation.

V. NPP’S ECONOMIC POLICY DIRECTION
To achieve our objectives, our principal economic policy direction will be to:

a. restore macroeconomic stability
2. shift the focus of economic management from taxation to production

3. manage the economy competently, and
4. make the machinery of government work to deliver the benefits of progress to Ghanaians.

a. Restoring Macroeconomic Stability
The NPP will restore and maintain macroeconomic stability through the pursuit of sound policies on the basis of an enhanced institutional framework. Macroeconomic stability is built around three pillars: monetary discipline, fiscal discipline, and financial stability. To reinforce monetary discipline, the Bank of Ghana Act, 2002 (Act 612) established the Monetary Policy Committee (MPC) to guide the implementation of monetary policy. The other two pillars (fiscal discipline and financial stability) have no such institutional anchors.

Enhancing Fiscal Discipline
Fiscal indiscipline has been the bane of economic management in the country. To address this, the IMF recently insisted on the passage of a Public Financial Management Act. However, the law, as enacted, is woefully inadequate, because it lacks the key elements that will protect the public purse from abuse. Fiscal policy implementation, as it stands now, lacks three basic elements; absence of a transparent institutional arrangement for providing quality fiscal information to the public, absence of a mechanism for ensuring accountability in implementing optimal fiscal policies to guarantee the stability of the system, and the absence of an institution to ensure the credibility of fiscal projections provided by the Government.

To address the problem of the current high public debt levels and the country’s high risk of debt distress, an NPP government will adopt and implement rules to anchor fiscal policy implementation. For example, there will be specific targets for the reduction of government borrowing and debt.

In this regard, an NPP government will enact a Fiscal Responsibility Law (FRL) to bring comprehensiveness, accountability, transparency, and stability to the entire budgetary process. Under this law, a Fiscal Council would be established to contribute to the accountability of Government, responsible for setting up medium-term fiscal policy anchors to guide fiscal policy as well as monitor compliance.

Enhancing Financial Stability
In this year’s State of the Nation Address, President John Mahama attributed the problems emanating from the collapse of microfinance institutions, like DKM and God is Love, to a failure of banking supervision. From what we know today, this is only the tip of the iceberg. The banking sector has been highly exposed to debt from BDCs, energy sector debts, and non-performing private sector loans. As a result, at least 8 banks in the country are on the verge of collapse if something is not done urgently. The financial stability pillar of the macroeconomic framework has been weakened under the NDC government. To address this over the long term, the NPP will establish a Financial Stability Council (akin to the proposed Fiscal Council) that is well grounded in law. Its mandate, among others, will include assessing the vulnerabilities affecting the stability of the financial system.

In addition, to restore overall macroeconomic stability, the NPP will:

i. undertake financial sector reform to deepen financial markets, promote financial inclusion, enhance the supervision and regulation of the financial institutions and move the country’s payment system away from a predominantly cash towards an electronic payments system

ii. implement a strategy aimed at repositioning the country as an International Financial Services Centre (IFSC), like Mauritius, within the region to create jobs

iii. formalize the economy through the establishment of a national database, using the National Identification System as the primary identifier, with linkages to the databases of institutions such as the Police, National Health Insurance Scheme (NHIS), Passport Office, Immigration, Courts, Ghana Revenue Authority (GRA), and the Driver and Vehicle Licensing Authority (DVLA), and

iv. stabilize the currency exchange rate for the long term through prudent and disciplined macroeconomic management, an increase in domestic production, and an increase in exports. In addition, there would be a reinforcement of section 40 of the Bank of Ghana Act, 2002 (Act 612) by keeping relatively stable, the ratio between the currency in circulation and foreign exchange cover.

b. Shifting the Focus of Economic Management from Taxation to Production

The mismanagement of the economy under the Mahama-led NDC government has resulted in an increase in taxes on virtually everything taxable. This has increased the burden on the private sector and has become a disincentive for production.

To address these challenges, the NPP will shift the focus of economic policy away from taxation to production by:

i. reducing the corporate tax rate from 25% to 20%
ii. removing import duties on raw materials and machinery for production within the context of the ECOWAS Common External Tariff (CET) Protocol

iii. abolishing the Special Import Levy
iv. abolishing the 17.5% VAT on imported medicines not produced in the country

v. abolishing the 17.5% VAT on Financial Services
vi. abolishing the 5% VAT on Real Estate sales
vii. abolishing the 17.5% VAT on domestic airline tickets

viii. reducing VAT for micro and small enterprises from the current 17.5% to the 3% Flat Rate VAT introduced by the Kufuor-led NPP government

ix . introducing tax credits and other incentives for businesses that hire young graduates from tertiary institutions, and

x. reviewing withholding taxes imposed on various sectors (including the mining sector) that have constrained the liquidity of many businesses

The ensuing increase in production and economic growth, arising from a streamlining as well as the elimination and reduction of some of these taxes, will more than compensate for any temporary revenue shortfall. Growth is expected to increase to double digits starting 2017. Indeed, during the NPP tenure between 2001 and 2008, corporate taxes were slashed from 32% to 25% and tax revenue actually increased! The data shows that, notwithstanding (or because of) the high level of taxes, there is a revenue shortfall of GH¢700 million for the first half of 2016.

Additional sources of revenue, and therefore fiscal space to finance these tax reductions will include:

i. broadening of the tax base as a result of formalization of the economy

ii. the increase in tax compliance
iii. reduced government expenditure as a result of increased collaboration with the private sector and prioritization of government expenditure

iv. savings from the reduction of interest rates paid on the country’s debt stock

v. increase in oil and gas revenues from TEN and SANKOFA fields

vi. elimination of corruption, especially in the procurement of goods and services, which is estimated at about 1.5% of GDP annually, and

vii. plugging leakages in the administration of public finances. The Auditor General’s Report has indicated that between 2012 and 2014, GH¢5.9 billion of government funds cannot be accounted for.

Collectively, these measures will more than exceed any revenue shortfall from the reduction in taxes.

c. Competent Management of the Economy
The NPP has a solid record of economic management, including growing the economy, holding down debt judicious use of public finances while displaying a high sense of fiscal responsibility.

The first transformation Ghanaians will, therefore, witness under the next NPP government, after the 2016 elections, is the transformation from the mismanagement, incompetence, and corruption under the Mahama-led NDC government to prudent management, competence, and integrity under an NPP government.

d. A Government Machinery that Works
Under the Mahama-led NDC government, the quality of service delivery across all levels have broken down.

Ordinary Ghanaians encounter deep frustrations and needless obstacles attempting to access public services from government agencies and institutions, including acquiring driving licences, acquiring passports, registering businesses, processing pension payments, processing payrolls for new teachers, nurses, doctors, and police officers, and land document registrations.

The NPP believes that the purpose of Government is to help improve our lives, that of our families, and our communities, and an inefficient government machinery defeats this purpose, no matter the investments government allegedly makes in infrastructure.

In this direction, in addition to managing the economy competently, the NPP will immediately deploy resources, both in equipment and personnel, in fixing the basics of the government machinery in order to deliver standardised services at affordable, transparent prices, faster turnaround times, and with professional handling of exceptions and grievances.

In sum, we will make Ghana work again.
Chapter 2
TRADE AND INDUSTRY
Unemployment today has reached unprecedented levels under John Mahama. Millions of Ghanaians wake up each day to the soul-destroying reality of joblessness and they spend their energies looking for non- existent jobs. Young people complete school, acquire qualifications and end up frustrated, with no prospects of a job or a career.

Young people, who have had to drop out of school, are unable to acquire skills or a profession, or even when complete schooling, cannot find work nor start a business because they are unable to find help.

The job market, including that for even skilled professions like teaching and nursing, which, under the NPP, had readily available jobs, have been hit hard as a result of the mismanagement, incompetence and corruption of the Mahama-led NDC government.

Since job creation, for us in the NPP, is essentially a private sector activity, the number one priority for the next NPP government will be to put in place the policy framework that will help businesses expand and create jobs, as well as promote the growth of entrepreneurship opportunities for young Ghanaians in particular.

The agenda for job creation would be underpinned by, among others, the following:

a. pursuing aggressive industrialization and value-addition to agricultural produce

b. providing tax and related incentives for manufacturing businesses in sectors such as agro-processing, light industries, pharmaceuticals, petrochemicals, garments and textiles, among others

c. providing a reliable and cost effective mix of energy supply for businesses

d. providing the necessary incentives for private sector participation in health service delivery

e. pursuing policies that will reduce interest rates

f. implementing policies that will reduce the cost of doing business

g. stabilizing the currency
h. providing incentives to the hospitality and creative industries that will enable them create jobs

i. investing in skills training and apprenticeships, and

j. promoting exports, especially of value-added agricultural produce and light manufactures.

The country’s industrial sector faces significant challenges, the principal ones of which are lack of access to finance, high interest rates, inadequate and poor quality raw materials for industrial processing, poorly developed domestic trade, weak consumer protection, lack of effective collaboration between research institutions and industry, poor trade facilitation, an unstable exchange rate, lack of coherent industrial development planning and initiatives, poor research and development support scheme for industry, lack of land for industrial zones, high import duties on raw materials, poor standards of certification, and an unreliable and expensive power source.

Our strategy is to address these challenges in ways that enable industry to thrive and become a major source of jobs, especially for the youth.

I. BUSINESS FINANCING
The challenges of raising finance for businesses in the country include;

a. high cost of capital: interest rates hovers around 34%pa

b. inadequate medium-to-long term financing and venture capital funding, and

c. inadequate credit financing for SMEs
To address these challenges, the NPP will:
a. refocus the National Investment Bank (NIB) to provide finance for the industrial sector

b. establish an Industrial Development Fund (IDF) to finance critical private sector industrial initiatives. The Fund will be seeded and fed by funding from Government, multilateral and private institutional investors

c. realign the focus of Ghana Investment Promotion Centre (GIPC) to attract financing and investments into selected strategic industries, and

d. eliminate the current system of political patronage and restructure existing state-sponsored microfinance schemes such as MASLOC to provide credit for SMEs, while strengthening oversight responsibilities over privately-financed micro finance institutions.

II. COST OF DOING BUSINESS
Businesses face a high cost of doing business as a result of:

a. high cost of production and the running of businesses in general

b. high cost of utilities such as electricity, water, and communications

c. high taxes, fees, and other charges
To address these challenges, the NPP will reduce the tax burden on businesses, including on imported raw materials and machinery for production and on utilities.

III. EXPORT DEVELOPMENT
A key challenge to export development is the lack of a clear national implementation plan for export diversification and development.

To address this challenge, the NPP will:
a. develop and implement a comprehensive, project-based export diversification action plan based on the national export strategy

b. restructure the operations of the Ghana Export Promotion Authority (GEPA) to enhance export diversification to take advantage of EPA, AGOA, and Intra African Trade, and

c. provide support for organisations such as the Association of Ghana Industries (AGI), Ghana Exporters Association (GEA), and the Ghana Chamber of Commerce (GCC) for export promotion activities.

IV. ENERGY FOR INDUSTRY
By far one of the biggest challenges industries and businesses have faced for more than five years is inadequate supply of power due to:

a. unreliable and unstable power supply for industrial production, otherwise known as DUMSOR

b. inadequate, industry-targeted power supply polices, and

c. high cost of energy across board for industries and businesses.

The NPP will address these challenges by undertaking the following measures:

a. solve DUMSOR, the current unreliable electricity supply crisis

b. re-orient energy tariff policy to reduce the burden on businesses

c. promote the supply of energy in support of production-related activities

d. create dedicated quality and reliable energy supply sources for industrial enclaves and zones

e. provide incentive schemes for the development of specific renewable energy projects for industrial development, and

f. reduce significantly the operational inefficiencies in energy supply and distribution.

Chapter 3 of this manifesto provides, in detail, our energy sector solutions.

V. ENTREPRENEURSHIP AND BUSINESS DEVELOPMENT
Businesses also face the challenges of:
a. inadequate public support for entrepreneurs, especially in the Small and Medium-Scale Enterprises (SME) sector as well as start-ups, and

b. poor management of entrepreneurship training infrastructure and facilities.

To address these challenges, the NPP will:
a. launch a comprehensive National Plan for Entrepreneurship and Innovation that will invest in supporting young businesses and start-ups, and

b. merge the National Board for Small Scale Industries (NBSSI) and Rural Enterprises Project (REP) to consolidate public resources in the provision of entrepreneurship training and business development services.

VI. RAW MATERIALS FOR INDUSTRY
Inadequate and poor quality raw materials for industrial processing is one of the key challenges industries face. To address these, the NPP will:

a. provide specific incentives for the production and supply of quality, locally-produced non-agricultural raw materials for industry at competitive prices, and

b. provide a comprehensive programme of support for the cultivation of selected agricultural products as raw materials for agro-processing, including tomato, cassava, cocoa, soya beans, maize, oil palm, cashew, cotton, sheanut, selected fruits, groundnuts and rice.

VII. R&D FOR INDUSTRIAL DEVELOPMENT
There have also been poor schemes to support the research and development activities of industry. To address this challenge, the NPP will:

a. refocus the operation of public research institutions to provide R&D support for selected strategic industries, and

b. provide specific incentives for the establishment of R&D laboratories by the private sector

VIII. ACCESS TO LAND FOR INDUSTRIAL DEVELOPMENT
Industry has also faced incoherent industrial development planning initiatives, as well as lack of land for the development of industrial zones. The NPP will address these challenges as follows:

a. facilitate access to dedicated land spaces in every region for the establishment of multi-purpose industrial parks, sector specific industrial enclaves, and enterprise free zones

b. aggressively support the development of existing and new industrial clusters and manufacturing enclaves, with a renewed focus on value addition, skills development and jobs creation, and

c. develop vibrant commercial zones in our proximate international boundary areas to the north, east and west and explore the possibility of working jointly on industries with our neighbours in these commercial zones to create jobs, and as part of our efforts towards stronger economic integration of the ECOWAS region.

IX. SKILLS DEVELOPMENT FOR INDUSTRY
Skills shortage is one of the critical areas that the NPP will address urgently. In this direction, the NPP will:

a. establish apprenticeship and skills development centres to train skilled labour force for specific industrial sectors

b. develop, in collaboration with trade unions, a database for trained apprentices and artisans, and establish a National Apprentice

Recruitment Agency
c. in partnership with the private sector, transform the apprenticeship training model from a supply-driven approach to a market- demand model based on the German apprenticeship model, and

d. create an information portal and set up a task force to assist our youth and artisans in making their products and services visible on a local, national, and global scale.

X. DOMESTIC TRADE
Challenges faced by Ghanaian businesses in the retail sector include:

a. weak macroeconomic fundamentals, especially the exchange rate, lending rate and inflation rate among others

b. flouting of rules regarding retail trade
c. high level of taxes
d. high cost of doing business, especially the high prices of utilities and rent

e. inadequate access to government procurement opportunities and contracts, and

f. lack of governmental support for local market infrastructures

To address these challenges, NPP will:
a. ensure strict compliance with existing legislation and regulations in respect of retail trade

b. develop modern markets and retail infrastructure in every district to enhance domestic trade

XI. TRADE FACILITATION
Ghanaian businesses face many challenges in exporting or importing goods at the ports. These challenges include:

a. excessive bureaucracy at the ports
b. high port charges and fees, and
c. high incidence of corruption at the ports
To address these challenges, NPP will:
a. reduce fees and charges at the ports
b. introduce reforms in port clearing systems and benchmark our ports against some of the best in the world, such as Dubai and Singapore, to make them the most efficient in Africa to support import and export trade, and

c. restructure the Customs Division of the GRA to optimise its operational efficiency.

XII. CONSUMER PROTECTION
To protect Ghanaians from inferior quality goods, products, and services, we will:

a. facilitate the passage of a Consumer Protection Law, and

b. strengthen the operations of the Ghana Standards Authority (GSA).

XIII. FLAGSHIP INDUSTRIAL DEVELOPMENT INITIATIVES
a. “One District One Factory Initiative”: In collaboration with the private sector, the NPP will implement the “One District, One Factory” Initiative. This District Industrialization Programme will ensure an even, spatial spread of industries.

b. Strategic Anchor Initiatives: Government will partner private local and foreign investors to develop large scale strategic anchor industries to serve as growth poles for the economy, especially in petrochemicals, pharmaceuticals, iron and steel, cement, aluminium, salt, vehicle assembly, manufacture of heavy machinery, equipment and machine parts, agro-processing, garments and textiles, assembly of electronics and light machinery.

c. Industrial Sub-contracting Exchange: Through a concerted, collaborative and collective effort, the NPP will enforce local content provisions by developing efficient and competitive local supplier networks for the goods and services that industry needs and that can realistically be sourced locally. To facilitate this, the NPP will develop a National Industrial Sub-contracting Exchange to link SMEs with large scale enterprises.

XIV. MANAGING INDUSTRIAL WASTE
The NPP government will support the establishment of recycling and reprocessing companies to manage industrial waste. This will extend the industrial value chain as well as create a new raw material base for existing and new industries.

XV. EMPOWERING LOCAL BUSINESSES
The NPP believes in empowering the local private sector and will pass legislation to require that at least 70% of all Government of Ghana, taxpayer-financed contracts and procurements be executed by local corporate entities.

In addition, the NPP will introduce a policy requiring that 30% of the required 70% be sourced from entities owned by women, persons with disability, and those established under the Youth Enterprise Fund (YEF).

XVI. SUPPORT TO INDIGENOUS QUARRY, BUILDING, AND CONSTRUCTION

To create jobs, whilst also supporting the quarry, building, and construction industry in the country, the NPP will provide tax incentives for the importation of quarry equipment, as well as facilitate the establishment of credit lines to enable the industry acquire state-of-the-art technology.

XVII. ATTRACTING FDIS INTO LABOUR INTENSIVE SECTOR
The NPP will promote greater integration with the global economy and encourage Foreign Direct Investments (FDIs), especially in

The NPP will promote greater integration with the global economy and encourage Foreign Direct Investments (FDIs), especially in labour intensive sectors such as garments, textiles, agro-business and light manufacturing.

New Patriotic Party (NPP) • Manifesto for Election 201632

XVIII. EMPLOYING ALREADY TRAINED ESSENTIAL WORKERS
The NPP will facilitate the early placement of trained nurses, public health personnel, and teachers who have been denied employment by the NDC government.

XIX. HARMONY IN INDUSTRIAL RELATIONS
The NPP will work with stakeholders, including employers and trade unions, in an open, trustworthy and fair manner on employee welfare, as well as ensuring living wages for all workers. In this direction, we will:

a. develop, in collaboration with employers, trade unions, educational institutions and other state bodies, such as SSNIT, a database of the labour market with the view to establishing a National Recruitment Agency to serve as the primary source for channelling job openings to Ghanaians

b. develop labour market policies to build an employable, skilled labour force that is focused on personal and career development to promote mobility for higher productivity. The policies will also address industrial relations to enhance harmony between stakeholders, and

c. work with employers and trade unions to formulate a policy of comprehensive occupational health and safety standards

In sum, ours is a holistic approach to job creation. The job creation strategies outlined in this chapter are by no means exhaustive. Other job creation initiatives have been covered under the other sectors in this manifesto.

ENERGY AND PETROLEUM
Under the Kufuor-led NPP government (2001-2008), significant contributions were made to the country’s energy resources and infrastructure as a result of our bold and farsighted policies. These included:

i. the discovery of oil and gas in commercial quantities

ii. the construction of the West African Gas Pipeline

iii. in response to the emerging energy crisis of 2006/2007, through facilitations, procurements, and construction, an addition of 1440MW to Ghana’s generating capacity as follows:

• Bui Dam (400MW) • Tema Thermal 1 Power Plant - TT1PP (126MW)

• Tema Thermal 2 Power Plant – TT2PP (49MW) • Mines Reserve Plants (80MW)

• Kpone Thermal Power Plant (220MW)
• Additions to Akosombo Hydro Power (108MW)
• Takoradi 1 Power Plant – T1, Aboadze (132MW) • Sunon Asogli Plant (200MW), and

• Osonor (now CENIT) Plant (126MW)
I. POWER SECTOR
The NDC government inherited an economy with no DUMSOR in 2009. However, the energy sector has since been badly managed. The poor management of the sector has been characterized by shortfalls in power generation, corrupt and opaque procurement of new power plants, frequent power cuts, inefficiencies and unsustainable inter-utility debts, which threaten the satisfactory long-term operation of the power sector.

These problems have led to five years of DUMSOR and brought devastation to our industries, particularly small businesses. DUMSOR has caused job losses, income losses, unnecessary deaths, disrupted life and destroyed countless equipment and electrical appliances of businesses and homes.

The effect of the last five years of DUMSOR on our economy has been devastating. The Institute of Statistical Scientific and Economic Research (ISSER), in its 2014 study, indicates, that on average, the country is losing production worth about US$ 2.1 million per day (or, US$ 55.8 million per month) as a result of DUMSOR alone and that, the country lost about US$680 million in 2014 translating into about 2% of GDP due to the power crisis.

Whilst the President is engaged in questionable power procurements, our dedicated state-owned power infrastructure from which revenue is generated by our utilities is collapsing. Akosombo has constantly been over-drafted, thermal plants are frequently breaking down; and all our plants operate below capacity. The Takoradi 3 Thermal plant has been shut down, although it was commissioned only two years ago. It is not surprising, therefore, that the country’s efforts in industrialization is clearly in danger under the Mahama-led NDC government.

Today, the energy sector faces an unprecedented financial crisis. The very existence of our biggest electricity generator, the Volta River Authority (VRA), is under serious threat, as its debts continue to increase. VRA’s debts stand at US$1.53 billion as of March 2016. These debts, which exclude current interest, roll-over fees and other charges are expected to hit $2 billion by the end of this year. This is not only affecting VRA’s survival, but also the domestic banking sector.

Rather than redeem its indebtedness, the government chose to burden the Ghanaian people with suffocating electricity tariffs and vanishing power credits. The government’s response to the large inter-utility debts is to impose additional taxes on the use of petroleum products and electricity. This has further reduced the competitiveness of our local industries. The cost of electricity to industry has been so alarmingly high

it has led to the collapse of many industries and small businesses and to the relocation of others to neighbouring Cote d’Ivoire.

It is now clear that Mahama has run out of things on which to blame DUMSOR. From acts of God, to blaming Nigeria, to wishing it away, it is obvious that, five years into this state of affairs and Mahama announcing that he had fixed DUMSOR, he does not know how to provide Ghanaians with a long-term, stable and reliable electricity supply.

The hard, cold truth is that despite the recent election-inspired, artificial semblance of stability in the power supply situation, the fundamental challenges leading to DUMSOR remain, and the quick fixes have instead resulted in the imposition of high-cost emergency plants on Ghanaians, corruptly procured from AMERI and KARPOWER. We still owe millions of United States Dollars to Nigeria for gas supplies.

In fact, Mahama’s greatest legacy to Ghana as President is DUMSOR.

There is increased uncertainty about the future stability of power supply under the NDC government. Many businesses and residential consumers of electricity are justifiably afraid that DUMSOR would come back, if the NDC is retained in power, as it has not demonstrated capacity in addressing these challenges.

The nation must change course if we are to stop job losses, poor management of our energy sector and eliminate the financial burden imposed by government on our utility companies.

What the NPP will do: The NPP’s vision for the energy sector is to develop a modern, diversified, efficient, and financially sustainable “Energy Economy” that will ensure that all Ghanaian homes and industries have access to an adequate, reliable, affordable and environmentally-sustainable supply of energy to meet their needs and to support the accelerated growth and development agenda we envisage for the country.

The NPP will achieve these goals through the following measures:

a. end “DUMSOR” in the short-term, through government liquidity injection, restructuring of debts, and securing of firm commitments for the reliable supply of fuel

b. reduce taxes on electricity tariffs to provide immediate relief to households and industry

c. conduct a technical audit on all power sector infrastructure and develop and implement a 10-year Power Sector Master Plan which will be reviewed thereafter, to meet our medium to long- term energy needs

d. ensure that the procurement of new power projects are executed primarily through PPP and IPP arrangements, which will be carried out in a transparent and competitive manner in order to achieve a least-cost addition of power generation infrastructure. The current basis for procuring additional generation assets is inefficient and costly, and discourages production

e. develop and implement an Energy Sector Financial Restructuring and Recovery Plan, incorporating, a liquidity management mechanism for VRA, Electricity Company of Ghana (ECG), Northern Electricity Department (NED) and the BDCs

f. leverage natural gas as a long term source central to the operation of the power sector. Consequently, the NPP will develop and implement a long-term LNG utilization programme. In addition, the NPP will encourage and provide incentives to the private sector to develop aggressively potential sources of indigenous natural gas in addition to those from the Jubilee, TEN and SANKOFA oil/gas fields

g. ensure that there is sufficient Reserve Margin – the safety cushion we need to prevent blackouts – to ensure the stability of the system

h. rapidly move to the adoption of a distributed solar energy solution for all government and public buildings

i. create an environment of clear policies, rules and regulations, and provide adequate price incentives to attract private sector investments. The NPP will prioritise and ensure actions to enhance and improve the capacity of the regulatory bodies, namely the Public Utilities Regulatory Commission (PURC) and Energy Commission (EC) to discharge their responsibilities in a more transparent, timely and efficient manner. The objective will be to ensure that costs in the sector are recovered in a timely manner, the utilities receive a fair return on their investments and consumers pay only for acceptable and efficient operation of the utilities

j. aggressively pursue energy conservation and the efficient use of energy, including reduction of transmission losses. In 2007, the NPP government led a nationwide free distribution of 6 million compact fluorescent bulbs to consumers to replace incandescent bulbs, which led to a saving of about 200MW. We will implement similar initiatives involving LED bulbs and the introduction of Minimum Energy Performance Standards for electric motors and industrial equipment

k. ensure that energy is produced and used in an environmentally sound manner

l. work within the framework of Ghana’s obligations under the Clean Development Mechanism (CDM), UN Framework on Climate Change (UNFCCC) and Conference of Parties 2015 (COP21). Under this framework, the NPP will ensure that least- cost environmentally friendly technologies are prioritized in the expansion of the country’s thermal generation portfolio. In particular the Renewable Energy law will be reviewed to regulate and incentivise investments in renewable technologies

m. restructure the power sector by bringing all hydro generation exclusively under VRA and create a separate thermal market, and

n. explore the possibility of geothermal and tidal wave energy.

Renewable Energy Development Ghana should develop low carbon energy to ensure environmental sustainability, energy security through diversity of energy sources and the creation of green jobs. In this direction, the NPP will:

i. increase the proportion of renewable energy in the national generation mix by harnessing alternative energy options to ensure the expansion of low carbon energy in our economy

ii. rapidly move to the adoption of a distributed solar energy solution for all government and public buildings to reduce demand on the national grid and reduce government expenditure on electricity

iii. build solar parks in the northern part of the country. To achieve this, we will provide investment tax credits to owners of commercial, industrial, and utility scale solar photovoltaic (PV) systems to take a one-time tax credit of qualified installed costs

iv. develop solar and wind mini-grids for irrigation and community water supply around the country through Public Private Partnerships (PPPs), and

v. ensure local supply of solar panels to meet the requirement of our policy proposals, by establishing a Renewable Energy Industrial Zone where the private sector will be supported to build factories for the production and assembling of the full components of solar power systems.

II. PETROLEUM SECTOR
In 2007, when commercial quantities of oil and gas were discovered in the Jubilee Fields as a result of the Kufuor-led NPP government’s bold and farsighted policies, many Ghanaians hoped for improved conditions of living through the transformative effect of oil.

Ghana produced first oil in 2009. Seven years on, many Ghanaians have lost hope in the promise of oil. What they see under the Mahama-led NDC government is an unrestrained move towards what is popularly called the “oil curse”.

The oil and gas sector has been poorly managed to the extent that our oil is exported in crude form, even though we have a refinery that can add value to it. Ghana’s oil industry no longer attracts serious investors, despite the substantial de-risking of some of our oil basins. Inexperienced and unknown companies are holding exclusive oil rights in our basins, most of whom are not fulfilling their work obligations.

Countries, that have benefited significantly from oil, implemented policies that accelerated value addition to the economy, by promoting the development of forward and backward linkages and by investing revenue from oil in strategic social and economic programmes. This has not been the case in Ghana. Ghanaians are yet to feel the impact of the oil and gas sector seven years into production although US$3 billion has been received by government as its share of the revenue from oil.

Holders of Ghana’s Petroleum Agreements are unsuccessfully shopping for money because they have no track record, leaving our oil blocks inactive. This situation is the result of the lack of credible processes for ensuring a transparent and efficient allocation of exploration rights.

In the downstream sector, the Mahama-led NDC government’s failure to finance petroleum subsidies, occasioned by exchange losses and manipulations of the automatic price adjustment formula, have led to huge accumulation of debts by BDCs, some of which can no longer raise letters of credit to support petroleum importation.

Rather than solve the problem, the government chose to kill the local companies by taking their businesses for the Bulk Oil Storage Transportation Company (BOST), which was established to keep strategic reserves, thereby undermining the indigenization policy in the downstream petroleum sub-sector and contributing to job and revenue losses. In the process, BOST has moved away from its core mandate and become virtually the sole importer of crude oil under arrangements that are not transparent.

In addition to this, the implementation of the petroleum price deregulation policy is facing some difficulties. Crude oil price reductions do not translate into pump prices, as a result of the government’s appetite for revenue, and this has deepened the macroeconomic instability which has further contributed to a loss of business confidence.

What The NPP will do:
The NPP commits to a transparent, accountable and efficient management of the country’s petroleum resources for the benefit of all Ghanaians.

In pursuant of this, the NPP will:
Petroleum Upstream and Mid-Stream Sector
a. improve transparency in the management of our oil and gas resources. Our commitment to passing the Right to Information Bill will further enhance transparency in the oil and gas sector

b. create an enabling environment through fiscal and non-fiscal measures to attract domestic and foreign investments in oil and gas exploration

c. in collaboration with the private sector, accelerate oil exploration in the Voltaian Basin (Northern, Volta, Ashanti, Eastern, and Brong Ahafo), as well as in the Keta and Accra Basins to enhance Ghana’s potential for increasing oil and gas production and to build these areas into industrial growth poles

d. develop, in collaboration with the private sector, Western Region into a regional oil services hub with a first class port facility, as well as positioning it as an efficient centre for back-office support for the oil industry in the West African region, including the relocation of the headquarters of GNPC to the region

e. empower local firms to play progressively active roles in the oil and gas value chain through capacity development, financing and partnership support

f. aggressively invest in education and skills enhancement of Ghanaians to manage the oil and gas sector under an “Accelerated Oil Capacity Development Programme”

g. in collaboration with the private sector, create jobs in high impact areas such as fabrication and installation, manufacturing of equipment and parts and the construction of oil and gas infrastructure, and

h. restruct
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