General News of 2014-02-11

Prof. Quartey: Sending wrong signals will collapse the economy

Head of the Economics Department of the University of Ghana, Professor Peter Quartey, has parried suggestions that the country’s economy is in crisis.

Though he admitted that Ghana’s economy is facing hard times, he warned against negative comments, which could have a serious repercussion for the already precarious situation.

The Executive Director of the Centre for Freedom and Accuracy, Andrew Awuni, had claimed at a press conference Monday that Ghana’s economy is in crisis due to its poor management by the government.

He said, “the crisis that has hit the economy can be traced to two main fault lines; 1) The faulty Economic Fundamentals and some Self-Serving Government Policies and 2) The reckless and self destructive over-expenditure of over USD4 billion in the last three months of 2012.”

But Prof. Peter Quartey disagreed with the Centre for Freedom and Accuracy that Ghana is in an economic crisis.

“We are not [in an economic crisis]” he told Joy News in an interview on Monday.

He observed that such negative comments have the potential to dip the country’s economy, which he believes, is being addressed by the Bank of Ghana with its latest measures forbidding dollarization of the economy among other steps.

“I will like to use this medium to appeal to all Ghanaians; when we send such panic signals out, it’s likely to have repercussions on our economy.

“It’s just like saying a bank is failing, one little rumour will go out and eventually end up crippling the bank.

“In the same way, we have an economy, which is ours; if we send all these wrong signals out, we will end up crippling the economy,” he indicated.

Prof. Quartey noted that the current challenges are not too different from what happened in the country in 1983, where the economy was thrown out of gear with the resultant hunger, adding, it took pragmatic policies to arrest the situation.

The Head of the Economics Department of the University of Ghana reiterated the need for a cashless system to avoid business entities and individuals’ crave for dollars.

Meanwhile, Minister of Information and Media Relations, Mahama Ayariga told Joy News that Mr. Awuni’s assessment of the economy is a classic example of somebody who does not understand the directives issued by the Central Bank and “publicly displaying that ignorance”.

In the minister’s opinion, Mr. Awuni’s views, like that of many others, failed to touch base with the directives, citing as an example, Mr Awuni's indication that the hardship would be felt more at the end of the month where expatriates would have to go to the banks for their salary, which has always been in foreign currency.

Mr. Ayariga further explained that the directive does not bar international organizations such as the United Nations (UN) that pay their expatriate workers in dollars from doing so.

But companies cannot be paid with dollars when they execute any job in Ghana, he said; adding that those companies are, however, free to repatriate their profits in dollars through the banks, following the laid down procedures.

In a related development, the Information Minister said state agencies such as the Ghana Revenue Authority (GRA) and the Ghana Immigration Service (GIS) have been directed not to transact any business in dollars once it is done in Ghana.

Additionally, the ministries of Education and Tourism have been asked to ensure no school charges in dollars and no hotel prices its products in foreign currency, he noted.

Source: myjoyonline.com
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