Economic strategy will yield jobs in two years – Expert

Ken Ofori-Atta, Minister of Finance

Ken Ofori-Atta, Minister of Finance

Dr Lord Mensah, a finance and investment expert, says the economic strategy adopted by the government would yield fruitful results with creation of jobs in the next two or two-and-half years time.

He said the economic policies of the government were to create an enabling environment for the private sector to invest in the economy, hence the reduction and abolition of certain nuisance taxes in the budget statement in March this year.

Government had also stopped borrowing from the banks, therefore giving opportunity to the private entities and entrepreneurs to borrow from financial institutions to expand their businesses, he observed.

According to him, the decision has had tremendous impact on the macro-economic indicators resulting in the decline of the inflation rate, the lending rate and the stabilisation of the local currency and the exchange rate.

“Although the strategy adopted by the government is conservative but it is understandable because it wants to spend within its means, therefore, it will yield long term benefits,” he explained, saying; “Ghanaians should be patient and would reap the results in the next two or two-and-half years with creation of jobs”.

Dr Mensah, who is a senior lecturer at the Business School, Finance Department of the University of Ghana, gave this analysis in an interview with the Ghana News Agency, in Accra, in reaction to the government’s Mid-year Budget Review delivered by Mr Ken Ofori-Atta, the Finance Minister, to parliament last Monday.

The Finance and Investment Expert noted that the economic strategy by government would instil investor confidence in the national economy with evidence from the lowering of the macroeconomic indicators and, therefore, both domestic and international investors would like to take advantage and make quick money, he said.

“Government should remain focused in implementing its policies although pressure will mount on them from Ghanaians and even party faithful, but that shouldn’t derail its efforts,” he advised.

He urged the Finance Minister to be truthful at all times and communicate economic sense to Ghanaians.

“When you’re in opposition you may not have all the information on the economy so you can make promises but they did not give timelines to those promises,” he said.

Dr Mensah observed that the government would not like to increase the country’s debt stock at the moment hence it stopped borrowing from the domestic banks.

However, he said, government would start borrowing later when it realised that it had mobilised sufficient revenue and increased the production base of the export commodities.

Dr Mensah said if the government starts borrowing now, the treasure bill and other macro-economic indicators would shore up.

Commenting on whether the government could eliminate its arrears by 2019, Dr Mensah said it was feasible because the executive had weighed its policies and, therefore, expecting to increase its revenue base so that it would pay all the statutory arrears and allowances by that period.

He said the dwindling fortunes of the service sector could be attributed to the decline of the macroeconomic indicators and government’s refusal to borrow from the domestic banks.

Commenting on the failure of the government to meet its revenue target for the first half of the year, Dr Mensah said the country experienced downturn in the prices of the export commodities such as gold, diamond and cocoa from May to June, in addition to the abolition of some taxes.

He expressed optimism that if the government remained focused in spite of the pressure from Ghanaians and some party sympathisers to implement its economic policies, it would yield positive outcomes in the next few years.

 

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