All macroeconomic indicators point to Ghana being in economic distress – Kwesi Botchwey
Former Minister for Finance, Kwesi Botchwey, has said all macroeconomic indicators point to the fact that Ghana’s economy is in distress.
According to him, fast depreciation of the cedi to the dollar, the rising of inflation rate to double digits, accumulation of arrears as well as the flight of foreign capital from the country are all signs that point to Ghana’s economy being in distress.
“As we speak, all signs point to a country in some economic distress, the exchange rate is nearing the GHs 8 to the dollar, fuel prices have crossed the GHS 8 mark, inflation is back in double digits nearing 15%, the government is struggling to make money locally and is accumulating arrears to several programmes ie roads, School feeding and even LEAP.
“There is also ongoing flight of capital and foreign investors have withdrawn close to $200m in January alone,” remarked the former Finance Minister delivering a public lecture at the University of Ghana on the theme, ‘On the State of the Nation’s Economy and Politics: 65 years after independence – The Path to Sustainable Development and Democratic Consolidation’.
“Central to the economic distress the country faces is the perception that it is not creditworthy.
When money is borrowed, it is required that we put our public finances in a position to settle our debts. When servicing our debts can only be done at the expense of delivering public services, especially to the poor and vulnerable, then we are in trouble.”
“This is the predicament that we find ourselves in today. The issue really is not whether we go to the IMF or not. That is a red herring. Indeed, we are a sovereign nation, and a proud one at that and can decide as to whether or not to seek after the IMF. The IMF with all its power and leverage can simply not force a programme on us or any country,” he added, calling for reforms to restore the country’s macroeconomic stability.
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Mr Botchwey’s assertion of the economy being in distress and hence the need for the country to restore its macroeconomic stability was re-emphasized by World Bank Country Director for Ghana, Sierra Leone and Liberia, Pierre Laporte, who noted that said Ghana faces a tough time in its bid to restore macroeconomic sustainability.
According to Mr Laporte, Ghana’s economic situation is dire.
“Is it a really situation? Well, the numbers speak for themselves. The situation is very serious, at the World Bank, we’ve not hidden the fact when we’ve held discussions with government officials and even the head of state that, Ghana faces a very tough road ahead to restore macro sustainability.
“Yes, Covid-19 has not helped, but even before Covid, there were signs that the situation was getting a little bit challenging. So, the key thing is to be transparent with the people. Yes, the figures speak for themselves, but not everybody is as educated as we are. Not everyone understands what the numbers mean, so it is important to talk about it like we are doing. More important is for us to find solutions for the problem,” he opined.
Mr Laporte made the assertion speaking at the same public lecture at the University of Ghana on Monday, March 7, 2022.
The lecture was designed to provide a constructive platform for engaging and shaping solutions for the socio-economic challenges and prospects of Ghana.
Organized by the OneGhana Movement in partnership with the University of Ghana Department of Economics and School of Social Sciences, the event was held at the Cedi Conference Centre at the university’s Department of Economics.
