Stakeholders at a forum have identified the long-term commitment to restructuring the country’s economy as crucial for stimulating growth that will make the country self-sufficient.
They noted that restructuring the economy will among other things grow the revenue base of the country, reduce its debt rate as well as its over reliance on importation to the detriment of local industries.
The stakeholders were members of a panel at the Graphic Business, Stanbic Bank Third Quarter Breakfast Meeting, which was held under the theme: “Living Within Our Means: An Imperative for Economic Success.”
A member of the panel, Dr John Kwakye, Director of Research at the Institute of Economic Affairs (IEA), said even though it was alright for governments to run on debt, the size of the fiscal deficit was of utmost concern, especially when it was above the average rate for Sub–Saharan Africa.
He said it was worrying for debt servicing to take a chunk of the country’s revenue, especially in 2021 where 45 per cent of revenue went into debt servicing.
He said a total revenue of $12 billion was not substantial to “guarantee living within our means” adding that, “if we have to do that then we will be having a banana republic.”
Dr Kwakye called for expenditure cut through waste reduction, reduce public compensations by reducing size of government and exemptions granted privileged individuals and business entities.
He also advocated the review of natural resources agreement, which averagely seeded about 80 per cent of the country’s resources valued at 10 trillion dollars to foreigners with government having 20 a per cent stake.
Professor Eric Osei Assibey, Associate Professor of Economics at the University of Ghana (UG), speaking as Chairman of the occasion, said the situation where interest payment was accounting for 50 per cent of tax revenue, thus, one third of expenditure, meant that government was crippling itself from spending in relevant sectors of the economy.
He also observed that almost 50 per cent of Ghana’s debt was held by foreigners making the country overly sensitive to global investor sentiments and vulnerable to external shocks.
Mr. Kwamina Asomaning, Chief Executive of Stanbic Bank Ghana, said with Ghana not being the wealthiest of nations in terms of Gross Domestic Product (GDP), it should be acutely better at mechanising its trade-offs than more wealthier nations.
Alternatively, he said the country could circumvent difficult trade-offs by exploring other options of generating resources.
He noted that the ability to consistently manage trade-off between desires for today and needs tomorrow was a guarantee for building an organic buffer for unexpected shocks which were inevitable.
That, he observed, had, however, been difficult for most countries to do, including Ghana due to the notion of easy money and accessibility to borrowing hence making the temptation to live beyond their means very high.
“The idea of trade-offs is one of the most basic principles in economics that in order to have more of one thing, we must accept having less of something else,” he said.
Mr Ato Afful, the Managing Director (MD) of Graphic Communications Group Limited, said that the self-sufficiency the country sought would require a rethink and the resolve to make a change by restructuring the economy to improve lives.
That would entail discipline and the commitment of all citizens to make sacrifices for the better.
“The structure of our economy, referred to as the Guggisberg economy, is at the heart of the difficulty that Ghana has faced over the decades. We extract and export with no meaningful value addition.”
Other members of the panel were: President, Association of Ghana Industries (AGI), Mr Humphrey Darke, General Manager, Venture Capital Trust Fund, Mrs Hamdiya Ismaila.