The Economic Management Team (EMT) is optimistic of an inclusive transformation agenda to ensure social equity.
This is because; virtually all the economic indicators are showing positive results - a stable macroeconomic environment.
The general consensus is that it is prudent for the nation to get its macroeconomic fundamentals right, which would set the tone for businesses to expand and attract the needed investment to create jobs and engender economic growth.
Addressing a Town Hall on the economy dubbed ‘Our Progress, Our Status, Our Future’, Head of the Economic Management Team, Vice-President Alhaji Dr Mahamudu Bawumia, the performance of the fundamentals, including the inflation rate, gross debts, Gross Domestic Product (GDP) growth, were comparatively better under the current Administration than under the previous National Democratic Congress (NDC).
The maiden Town Hall meeting enabled the Economic Management Team to answer questions on the performance of the economy from representatives of civil society organisations, academia and members of the public.
The EMT engages with key stakeholders, implements government policies and offers solutions to socio-economic challenges.
Macroeconomic stability alone is not enough
Dr Bawumia however, admitted that macroeconomic stability alone is not enough saying it must translate into the wellbeing of Ghanaians in their everyday living.
“Our challenge is to make the distribution fair, especially to the benefit of the weak and vulnerable in society. This is the ultimate goal of inclusive governance,” he stated.
Efficiency in expenditure management
He said the gains experienced from the positive macroeconomic indicators was as a result of efficiency in expenditure management due to prioritizing and re-allocation of spending to areas most needed, noting that, fiscal deficit has been significantly fallen from 6.8 per cent of rebased Gross Domestic Product (GDP) in 2016 to an estimated 3.6 per cent in 2018.
Building Human Development Capacity and Expanding Job Creation, Enhancing Access to Public Services and Empowering Local Communities and Investing in Local Infrastructure are the three fundamentals.
Defending the performance of the cedi over those two periods, Dr Bawumia who has now been nicknamed ‘Walewale Adam Smith’ in reference to the father of economics said “the worst performance of the cedi so far, is better than the best performance under the NDC”.
He said that at the end of December 2017, the cedi accumulatively depreciated by 4.9 per cent compared to 9.6 per cent in 2016 which is the US dollar to the cedi’s best performance since 2011.
The cedi, he said, depreciated by 8.4 per cent in 2018 largely on account of emerging pressure and US interest rate increase.
The data on annual rate of depreciation in recent years showed the worst performance from 2017 -2018 but is better than the best performance between 2012 and 2016.
The start of 2019, he said it was characterized by sharp depreciation of the cedi, which has since been reversed.
IMF directive impacts cedi
Dr Bawumia noted that the cedi depreciation was on account of an IMF programme which required the Bank of Ghana to build up its reserves in a period of extreme demand pressures by some 800 million dollars, and had no room to intervene in the foreign exchange market in line with approved intervention policy.
This he said, partly explained the reason the Ghana cedi came under significant pressure early this year, which was exacerbated by speculation.
“The reason for the sudden reversal in the sharp depreciation that we observed was that the market corrected itself. Investors sentiments, expectations and uncertainties acknowledged that the fundamentals are much stronger than suspected, and that even without IMF the fiscal and monetary discipline are assured,” Dr Bawumia explained.
Recent growth performance
He explained that the recent growth performance has been mainly driven by industry and agriculture sector, with the latter particularly reflecting the effect of policy interventions in the sector most notably the Planting for Food and Jobs.
This has resulted in an increase in the agriculture sector growth from 2.9 per cent in 2016 to 6.8 per cent by 2018.
$2 billion Sinohydro projects start next week
The Vice President disclosed that President Nana Addo Dankwa Akufo-Addo would next week cut the sod for the construction of Interchange at Tamale and Takoradi which forms part of the country’s road infrastructure development.
The road infrastructure development is under the $2 billion Sinohydro Bauxite Barter Transaction between the Government of Ghana and Sinohydro Group Limited of China.
$1.5 billion Sinohydro cash for roads
Dr Bawumia stated that said $1.5 billion of the amount would be expended on road construction across the 16 regions to enhance socio-economic activities and engender economic growth.
The Sinohydro Bauxite Transaction agreement, which was signed in 2017 when Dr Bawumia visited China, demanded that the Chinese firm would build roads, interchanges and bridges for Ghana and Ghana would not pay anything for the first three years.
Afterwards, Ghana would mine the bauxite deposits, refine them within the country to add value to the mineral and use the proceeds from the sale of the commodity to pay the Chinese firm.
Vice President Dr Bawumia said government was pursuing inclusive transformation governance where everybody would be positively affected, adding that it had been building human capacity through the Free Senior High School Policy, Nation Builders Corps, Planting for Food and Jobs and reduction of the nuisance taxes and other social interventions.
Vice President Bawumia chairs the EMT, with Mr Yaw Osafo-Maafo, the Senior Minister, is the Vice-Chairperson.
The others are Mr John Peter Amewu, Energy Minister; Mr Ken Ofori-Atta, Finance Minister; Mr Alan Kwadwo Kyerematen, Minister of Trade and Industry; Dr Owusu Afriyie Akoto, Minister of Food and Agriculture; Professor George Gyan-Baffour, Minister of Planning; and Dr Anthony Akoto Osei, Minister of Monitoring and Evaluation.
Professor Amoako Tuffuor is the Secretary to the EMT.