Business community reviews economy

Accra, Oct. 1, GNA - Professor Ernest Aryeetey, Director of the Institute of Statistical, Social and Economic Research (ISSER), on Wednesday urged government to strive to bring about structural changes in the broad macro economic environment to ensure that the country enjoyed a sustained economic growth.

Prof. Aryeetey said the change was needed to boost both private and public sector interest to invest in long-term ventures. He was speaking at a business luncheon organized by the Ghana National Chamber of Commerce and Industry to review the economy. Prof. Aryeetey said management of Ghana's economy had not seen a sustained growth rate for a long time while economic indicators have also been unpredictable.


The Ghanaian businessman has gone through the situation for the past 20 years, he said, adding "they are aware of the volatilities and have managed to accustom themselves to the situation." As a result, the business community has not invested significantly to expand their businesses. Most of their investments have been for the short-term.


Prof. Aryeetey said the situation would remain until government brought about structural changes into the management of the economy. On the current half-year performance, he said, the country had performed poorly in attracting inflows to support programmes and projects.


It has however saved about 138 per cent of expected funds from the Highly Indebted Poor Country's Initiative.


Expenditure was far less by 22 per cent than the projected figure for the period.


Inflation was not as low as government expected as it recorded 16.3 per cent in January, 29.4 per cent in February, 29.9 per cent in March and 30 per cent in April.

In May the figure was 29.8, June, 29.6 and July, 29 percent with an average half year inflation pegging at 29 per cent.


Interest rates have recorded an average of 35 per cent within the same period as compared to deposits rates of 10.9 per cent.


Prof. Aryeetey noted that tax revenue exceeded target by about nine per cent but said the chunk of it came from import tax and not local sources.


He explained that government was not spending because of the shortfall in external inflows and reiterated that it was time for the country to reduce over dependence on external factors and nurture to improve on the economy.


Dr. Joe Abbey, Director of the Centre for Economic Policy Analysis, whose presentation of a review of the economy last month was challenged by the Ministry of Finance and the Bank of Ghana said it was time government accepted that certain aspects of the management of the economy were distressed and stopped shifting blames.


He said it was obvious that most of the revenue collected so far came from the efforts of the GCNET, a computerized system, which processes flows of goods at the ports.

Dr Kofi Konadu Apraku, Minister of Regional Integration and NEPAD, spoke on the implication of a single currency on the Ghanaian economy and said the achievement of the goal would bring about enormous benefits to the country.


Some of the benefits include trade facilitation and strong currency.


Dr Apraku said Ghana was close to achieving the convergence criteria and noted that participating countries with weaker economies, who have achieved the targets needed to start the implementation process with Ghana or Nigeria, who have stronger economies within the region of the second monetary zone.


The Minister said stakeholders of the ECOWAS region met last month to review the ECOWAS Trade Liberalization Scheme and to put in place measures to make it work.


The scheme had failed to achieve its purpose of free flow of goods and services along borders of member countries.