Business News of 2014-06-18

Take tough decisions to revive economy - Mahama told

Two internationally acclaimed economists have asked Ghana to forge a nationally unified government and return to the International Monetary Fund (IMF) to bail the country out of its current economic challenges.

According to the co-Director of the Oxford Institute for Global Economic Development, Prof. Paul Collier, and a former President of Switzerland, Mr Kasper Villiger, Ghana’s economy is in crisis, and there is the need for the country to take tough decisions to revive the ailing economy.

The two economists, who made the recommendations on an Institute of Economic Affairs (IEA) platform in Accra on Monday, urged Ghana to use the economic crisis as an opportunity for recovery.

“What I’m giving you is not a message of despair. Use the crisis to reset,” Prof. Collier remarked.

“I think the situation is serious. I think I’ll use the word crisis. I think you have a chance to solve it,” Mr Villiger also submitted.

The two renowned economists were part of a delegation from the Global Leaders Forum (GLF), who held a round-table discussion with some members of the Parliamentary committees on Finance, Energy and Public Accounts under the auspices of the IEA.

The GFL delegation included a former President of Botswana, Mr Ketumile Masire, and a former Zambian Minister of Finance, Dr Situmbeko Musokotwane.

The round-table discussion was on the topic: “Making Ghana’s natural resources count”.

It formed part of an initiative by the IEA started started in 2013 when it hosted a former President of South Africa, Mr F. W. de Klerk, to share some thoughts on how he and Nelson Mandela managed their country’s transition from apartheid to democracy on a united front.

Mr de Klerk’s mission on that occasion was to inspire Ghana to overcome a potential political crisis as the nation went through a tense election petition hearing at the Supreme Court.

Prof. Collier and Mr Villiger painted a gloomy picture of Ghana’s economy, which the participants generally admitted.

Some of the highlights were that Ghana’s share of capital formation had fallen from 7.5 per cent of gross domestic product (GDP) before 2009 to about 5.5 per cent currently while the rate of borrowing had been very high.

Additionally, with a huge budget deficit and an import cover for 10 days, instead of between three and six months for an oil-producing country, the two economists had no doubt that Ghana’s economy was in crisis now and needed a bailout.

In spite of the gloomy picture, Prof. Collier said Ghana could emerge from the economic crisis successfully, adding that there were many countries that had emerged from similar situations.

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