Ghana’s economy not resilient, says renowned economist
Renowned Economist, Dr. Kwame Pianim, has said Ghana’s economy is not resilient given it is failure to generate enough revenue.
Adding that the current macroeconomic environment are not enabling enough to drive investment and real growth.
According to him, the monetary policy rate is a key indicator of how the Bank of Ghana perceives the economy, adding, when the Central Bank increases its policy rate, it is indicative of the fact that it is not comfortable with the fiscal stance of the government.
He further said that structural imbalances between expenditure and revenue continue to affect the economy, adding, Ghana needs a cost-benefit analysis on the significant expenditures by the government, citing areas like Free Senior High School.
He questioned the excessive focus of the government on the revenue side of the economic equation with the often touted mantra that Ghanaian citizens are not paying enough taxes.
Instead, he argued that citizens pay different indirect taxes, especially Value aAdded Tax (VAT).
Mr Pianim stressed that the main area of focus for policymakers should be the expenditure side and recommended that government should use quality predictive models and analysis in their economic decision-making.
He finally remarked that “we should not waste the [current] crisis” but instead use it to create a better and sustainable macroeconomic environment.
Mr. Pianim made the above assertions speaking at the first IMANI-GIZ Reform Dialogue Series (RDS) themed “Ghana’s Macroeconomic Environment: An Enabler or Hammer to Investment?”.
The dialogue sought to engage relevant stakeholders in Ghana’s investment ecosystem to discuss how a conducive macroeconomic context creates the right investment climate.
The macroeconomic environment are the set of factors that affect investment and growth in an economy.
Basic indicators of the macroeconomic environment include inflation rate, exchange rate, the fiscal balance, and the external current account balance, among others.
