THE ECONOMIC WOES OF GHANA; WHOSE FAULT? The current economic woes bedeviling our country today can be objectively attributed to the various successive governments’ lack of political appetite to plan well for the future. There is no doubt that the Mahama led administration has exhibited a high level of ineptitude towards the management of the economy, however, the economic woes of today cannot be attributed to him alone. Under the leadership of President Kufour Ghana joined HIPC which led to the enjoyment of loan concessions and grants from our development partners, specifically the country enjoyed lower interest rate and long grace period of loan settlement. Foreign exchange was cushioned because of these inflows likewise our foreign reserves. In 2010, whether we hastily jumped to become a lower middle income country or the statistical figures were wrong no one knows. A country’s attainment of LMIC has got its own implications; no more loan concessions and massive inflows of grants. The question is, didn’t we foresee such implications and what did we do about?. It like Ghana has been living on subsistence basis, thus hand to mouth situation. How can we develop as a country without massive industrialization and be living on only two primary export commodities gold and cocoa so if the external market goes wrong we are doomed, where are the cushioning?. Our balance of trade have been persistently in deficit for a long period because we export less and imports more and these facts are glaring to every discerning Ghanaian. Inflation would keep on rising due to the depreciation of the Cedis which always pushes the cost of doing of business high. The over concentration on oil revenue to the neglect of other sectors which used to contribute immensely to our GDP and a typical example is the fishing industry which before we starting drilling the oil its contribution was much bigger than what the oil is contributing to our GDP. The oil contributes less than 2% to our GDP now. I wonder if indeed the recent fuel hikes is due to curtailment of government subsidies. The point is clear that we import crude oil with foreign exchange and so if our Cedis is depreciating, our revenues are mostly in Cedis so therefore we would need more Cedis for less crude oil which is in foreign exchange and so at this juncture government must increase the price not necessarily reducing subsidies. In the nutshell, our economic woes were compounding and it has gotten to a stage that the center can no longer hold. WE SHOULD BLAME OURSELVES!
Posted on: Tue, 22 Jul 2014 10:42:19 +0000
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