There is no way Ghana can achieve a single digit inflation target next year to enable her join the proposed single monetary zone, Dr Akoto Osei, Special Adviser to the Minister of Finance said.
"If the target could not be achieved in the last two years, I do not know how it can be achieved within a year to qualify us into the performance criteria of West Africa Monetary Institute (WAMI)," he said at a forum for the business community in Accra.
The Association of Chartered Certified Accountants (ACCA) organised it to discuss current economic issues and developments in the tax law.
Inflation at the end of June was at 35 per cent, down from the 40 to 50 per cent registered at the beginning of the year.
Dr Osei said there could not be a miracle at the end of the year to ensure a single digit adding, "we can only expect something like that after 18 months".
"There will be no positive changes this year, as our focus now is to get the basic structures and fundamentals right".
He wondered why the previous government opted for the WAMI criteria when they knew very well that it was not feasible considering the economic difficulties facing the country.
"The NPP government, out of diplomacy and commitment to the ECOWAS protocols, decided to maintain the position. It was a good idea but we do not have the kind of fundamentals for reaching that target".
Dr Osei said it was only a sustainable programme aimed at moving the nation out of the current economic quagmire that could help improve the situation.
He predicted a growth of between three and four per cent in the economy this year, saying the government's focus now was to bring the domestic debt overhang of almost six trillion cedis under control. "It is the number one threat to the economy today."
Dr Osei said government's decision to join the Highly Indebted Poor Countries (HIPC) initiative was a last minute addition to the 2001 budget because it was not possible to delay the process, considering the deep economic crisis facing the nation at the time.
"We had no choice but to go the way we did. What is necessary is what we do with the relief that we hope to get under the initiative.
Dr Osei said government has instituted measures to ensure that some of the relief is channelled into reducing the domestic debt.
The assumption of the delivery of assistance to Ghana is based on a decision point in December 2001 and a completion point in December 2004.
Professor Kwadwo Asenso-Okyere, Director of the Institute of Statistical, Social and Economic Research (ISSER) expressed apprehension about HIPC, saying it is slow, complex and has stringent conditions that must be followed in order to benefit from the relief.
"It requires a lot of paper work that will consume the limited time of busy government officials".
Prof. Asenso-Okyere urged government to quickly incorporate the initiative in the country's debt management portfolio and negotiate maximum interim debt relief in order to reap a timely respite from the crunch of over reliance on external loans for development programmes.
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