Change in structure of economy tops discussions at colloquium

Speakers at a colloquium in Accra have called for a change in the structure of the economy to promote economic stability of the country.

According to the speakers, a shift in the structure of the economy would help to address the perennial economic difficulties the country went through and forced the government to seek an International Monetary Fund (IMF) bailout.

The speakers, Minister of Information, Kojo Oppong Nkrumah; Dr John Kwakye, Director of Research at the Institute of Economic Affairs, Professor John Asafu-Adjaye, Senior Fellow and Head of Research at the African Centre for Economic Transformation and Tsonam C. Akpeloo, Chairman of the Greater Accra Region of the Association of Ghana Industries, were speaking at a colloquium dubbed 3 News Business Forum.

Organised by 3News, an online subsidiary of Media General it was on the theme “The Road to the IMF:  Achieving Low Inflation and Macroeconomic Stability, The Way Forward.”

Mr Nkrumah said the current economic challenges facing the country were structural and effects of the COVID-19 pandemic and not mismanagement, adding that the economic challenges facing the country had been exacerbated by the Russian-Ukraine war.

The Minister of Information explained that the government in 2020 had to spend more to procure personal protective equipment to save lives in view of the outbreak of the coronavirus pandemic.

He said the government expenditure did not match with revenue, indicating that the country’s Tax to Gross Domestic Product currently stood at 12 per cent which was below the Sub-Saharan average of about 16 per cent.

The Director of Research at the Ghana Institute of Economic Affairs, Dr John Kwakye, observed that the economic challenges could be attributed to exogenous and endogenous factors.

He said the government and the Bank of Ghana had to come together to initiate a programme to tame rising inflation and cost of capital.

That, he said, would make the cost of credit cheap to help the private sector to borrow and expand their businesses.

Senior Fellow and Head of Research of African Centre for Economic Transformation, Professor Asafu-Adjaye, said though the country had achieved some modest growth since 2017, the growth was “not enough.”

He said the country needed growth that was depth, explaining that there was the need for diversification of the country’s economy, export competitiveness and enhanced productivity.

Prof. Adjaye observed that the increase in monetary policy rate made the cost of credit expensive.

He called for policies and incentives to spur local production, indicating that a one-per cent increase in Gross Domestic Product would lead to a three-per cent decrease in inflation.

The Greater Accra Chairman of the Association of Ghana Industries, Tsonam C. Akpeloo, called for a comprehensive policy to support the private sector to grow.

Mr Tsonam expressed worry about what he described as “dollarisation of the Ghanaian economy,” where services and products were quoted in dollars, and said the practice was not good for the development of the country.

He said the private sector should be supported to be able to produce more for exports to attract more forex into the country.

Francis Doku, General Manager Media Group Television Limited, a subsidiary of Media General, in his remarks said the programme was to contribute to the discourse on the IMF programme.

He said the views which would be proffered at the programme would be collated into a document and presented to government.

BY KINGSLEY ASARE

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