On July 12, 2024, the Centre for Social Justice (CSJ) hosted the 13th edition of its impactful Leadership Dialogue Series (LDS), presenting vital economic recovery proposals for Ghana.
Themed "Ghana’s Economy from 2025 – 2028: The Hard Choices," LDS 13 featured discussions aimed at guiding the next government in restoring Ghana's economic stability.
Haruna Alhassan, a finance expert and fellow at the CSJ, delivered the keynote address.
He highlighted the significant challenges the upcoming administration will face, including high living costs, elevated unemployment, low accountability, substantial debt, limited fiscal space, and a sluggish economy.
"The road ahead will be tough. Tough, rough, and bumpy," Alhassan warned, adding that it is of utmost necessity for an experienced government to tackle these issues effectively from 2025 onward.
Alhassan critiqued the current administration's attribution of economic woes to external factors like the Russia-Ukraine war and Covid-19.
Instead, he pointed to internal decisions, such as spending GH¢339 million on the National Cathedral, poorly executed financial sector clean-up, and the central bank's GH¢40 billion government financing, as critical factors.
According to Alhassan, these decisions "better explain Ghana's situation."
He urged the next government to prioritize quick, decisive action over ceremonial appointments.
"The time we spend forming a new government in Ghana [3 to 6 months] can be very long," he said. "In my opinion, the new government should be ready before January 2025, and given the enormity of the situation, we really do not have time to waste."
The next administration must address the high cost of living by tackling food inflation, adjusting taxes on commodities like fuel, and making housing more affordable.
"Look at how the cost of building is going up. You wonder how many Ghanaians can afford to continue to stay in decent accommodation, especially going into the future," he noted.
Alhassan also called for a focus on youth unemployment, reducing corruption, and revisiting debt management strategies. He warned that without prudent investment of borrowed funds, Ghana risks perpetual financial instability.
"We may come out [of bankruptcy] temporarily because of the debt restructuring, but overall, we will still have a debt burden that we will struggle to pay. Going into 2025 to 2028, if you look at the payment profile of the restructured bonds, we cannot run away from having a second round of debt restructuring and it is important that we start that engagement right from 2025," he urged.
(Click here to watch a playback of the full event... https://drive.google.com/file/d/1mWos9t2_iJ4DF-SBerxNmNc-8pj-LMeo/view?usp=sharing)
Regarding the banking sector, Alhassan suggested increasing the minimum capital requirements to counteract the impact of currency depreciation and the debt exchange program.
"With the current bank minimum capital, banks cannot finance impact-making projects on their own and sometimes even when they come together," he said.
He proposed a flexible capital requirement regime to accommodate struggling banks. "For banks to be able to have that same strength as we envisaged in 2018 and 2019, we would need to look at raising the minimum capital requirements again," he stated.
Georgina Danso, a businesswoman, also spoke at the virtual event, emphasizing the need for the next government to create a conducive business environment and regain the trust of the business community through decisive actions rather than mere rhetoric.
"The next government has its work cut out... It is no mean feat what they would have to deal with. What we generally need is a conducive business environment because the business community in Ghana has lost a lot of trust in the government," she stated.
The CSJ is a think tank that promotes greater social inclusion in the distribution of wealth, privileges, and opportunities within society.
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