Transcript The Services Sector

The Services Sector
The service sector is the main channel through which
the primary and secondary sectors of the economy
operate.
Before the rebasing of the economy the sector was
categorised into six different sub-sectors:
• Transport, storage and communications
• Wholesale, retail trade, restaurants and hotels
• Finance, insurance, real estates and business
services
• Govt services
• Community, social and personal services
• Private non-profit services
After the rebasing the sector was divided into ten main
sub-sectors namely:
• Trade, Repair of Vehicles and Household Goods
• Restaurants and Hotels
• Transport and Storage
• Information and Communications
• Financial Intermediation
• Real Estate Services
• Business and Other Services Activities
• Public Administration and Defence, Social Security
• Education
• Health and Social Work; and Other Community, Social
and Personal Services Activities
Role of the service sector
• It contributes to GDP. E.g., in 2007 the
contribution of the sector to GDP was
estimated at 50.2%.
• It contributes to employment.
• The sector is importance source of
foreign exchange earnings. Tourism is the
fourth largest contributor to Ghana’s
foreign exchange earnings.
Role of the Service Sector Cont.
• Acquisition of technology via exports and imports of
services.
• Finance, insurance, real estate and business
services are important for mobilizing domestic
savings for investment in physical and human
capital.
• Communication services such as telephone
network, postal services, fax, telex, email as well as
radio and television transmission help improve the
operation of the products and factor mkts by
facilitating contracts b/w buyers and sellers.
Constraints
• Poor infrastructure. E.g bad road network,
poor data banks, computer systems, airports
etc
• Low participation in international trade in
services due to low capacity of prodn of
services. This arises out of difficulties in
acquiring visas and work permits.
• Employment in the sector is characterized by
low level of skills and inadequate qualified
personal.
Constraints Cont.
• Massive imports of services come in the form
technical assistance (i.e. foreign consultants and
experts).
• Lack of comparative advantages in the services
industry. Factor-related comparative advantages in
services which are basically lacking in Ghana
include:
Endowment in know-how and skill
The amount of existing physical infrastructure
The effective ability to apply technological
innovations etc.
Some Key Interventions
Under the SAP, some major
services sub-sector namely
finance and insurance,
transportation,
telecommunications and
tourism benefitted from
sectoral reforms.
Key Interventions
Finance
• The setting up of a non-performing asset
recovery trust to deal with problems of
recoveries and also, to clean up individual
bank’s sheet to enable them restart their
lending operations.
• A new banking law and an elaborate bank
prudential supervisory framework to ensure
that the banking institutions comply with
measures and standards.
Key Interventions Cont.
Finance Cont.
• Restructuring of rural banks to make them more
responsive to savings mobilisation. (abt. 22 rural
banks have been closed down due to financial
misappropriation, mismanagement and
misadministration)
• Privatization of state-owned banks-SSB in 1995
• Liquidation of 3 banks- Bank for Housing and
Construction, Co-operative Bank and the Bank for
Credit and Commerce.
Key Interventions Cont.
Transportation
• Rehabilitation of the triangular railway
network connecting Accra, Kumasi and
Takoradi
• Delivery of new locomotives in 1993
• In 1999, re-gravelling of 796km of road was
completed, 403km of roads were resealed
while the re-surfacing of 139km was
completed
Key Interventions Cont.
Transportation Cont.
• Sankara inter-charge project and
remaining works under the urban
transport project is completed
• Accra city roads project
• Phase 1 of Jasikan-Yendi road,
Rehabilitation of Lower Volta Bridge at
Sogakope and rehabilitation work at
Kotoka International Airport etc.
Key Interventions Cont.
Telecommunications
• Privatization of Ghana Telecommunications
• Liberalisation of the operation of value-added
services including mobile cellular telephone
service, data transmission and pay phone
services.
• Est. of a regulatory body, the National
Communication Authority (NCA) to regulate
the provision of services of the sector.
Key Interventions Cont.
Tourism
• Celebration of Emancipation Day
• African-American summit
• Est. of three new 5-star hotels
• Implementation of the 15-Year National
Tourism Devt Plan in collaboration with
identified stakeholders comprising public and
private sector institutions, donor agencies,
communities and non-governmental orgns.
The Way Forward
• Infrastructure and superstructure
investments should be embarked upon with
emphasis on historical heritage, cultural,
ecological, and recreational and conference
tourism.
• Sustained and planned strategic marketing of
Ghana as a competitive destination via
participation in international tourism fairs
and exhibition with more involvement from
the private sector.
The Way Forward Cont.
• Educational reforms which place emphasis on science
and technology
• Govt should initiate policies to improve on the
country’s comparative advantages in the services
industry. Comparative positions can be strengthened
via mergers.
• Consultancy services can be exported within the
sub region and in Africa. There is the need to
increase the awareness of Ghanaian professionals
and experts of the potential to export their
services.
The Way Forward Cont.
• The need to increase the range of financial
instruments available in the mkt, also
extending banking services to the larger
section of the population
• Govt. should ensure that the regulatory
mechanism reflect in the prodn of standard
services.
• Est. of efficient storage, transportation, and
distribution systems