Expert calls for independent body to steer Ghana's economic affairs

A senior lecturer in the Economics Department of the University of Ghana, Legon, Dr Eric Osei Assibey has called for the establishment of an independent fiscal responsibility council to oversee the economic affairs of the nation.

Dr Assibey said that a non-partisan body was needed to ensure that the country spends within its means while ensuring that growth is achieved.

Ghana has experienced economic challenges over the years, with recent crises occurring in 2008, 2012 and 2014. Its most recent challenge has pushed the country to seek assistance from the International Monetary Fund (IMF).

According to the government, the IMF deal will revive the economy with an expected US$900 million bailout. As part of the deal, spending cuts will be made to reduce the country’s fiscal deficit.

Dr Assibey believes the government made the right decision to turn to the IMF but maintains that this move could have been avoided.

He said that establishing strong fiscal rules is important to ensure that the country is able to maintain a good economic record. This can be better achieved through the establishment of a non-partisan independent fiscal responsibility council, he said.

His ideal independent fiscal responsibility council would provide checks and balances on government expenditure and revenue collection.

“We need a workable fiscal rule or better still an independent fiscal responsibility council that would be non-partisan in nature and made up of academics and think tanks. Its purpose would be to serve as a watchdog to government expenditure and revenue collection,” he said.

Dr Assibey would like to see such an institution make regular checks on the government’s revenue and expenditure to ensure that it spends within its means. In the event of leading the country into a huge deficit, the independent body would be well-equipped to streamline the government’s expenditure.

[This independent fiscal responsibility council] should be much more proactive, we don’t have to wait to be shocked at the end of the day when we realize that the government is overspending. Each quarter, the independent body should go into the government’s books to see how well it is doing in terms of spending,” he said.

Affordable Housing

Housing is a crucial component of any economy. Research conducted by the Center For Housing Policy shows that investment in affordable housing creates more jobs, increases government revenues and improves consumer spending. The ripple effect of these on an economy is added growth.

Dr Assibey said it was important for the government to incentivise private real estate developers to ensure adequate investment in affordable housing. He said incentives such as tax breaks and land banks would drive a positive reaction from the private sector.

Akua Nyame Mensah, Managing Director of online property portal Lamudi Ghana, said: “The oversight committee could probably provide some guidance on the additional benefits developers could receive from providing affordable housing.”

The real estate sector is a major contributor to most countries’ gross domestic products (GDP). According to the Ghana Statistical Service, the growth rate of the sector has hovered around two and a half percent between 2007 and 2010.

In its quest to improve and promote the real estate sector, the government of Ghana recently launched the country’s National Housing Policy. The housing policy aims to streamline the real estate sector and ensure housing is made more affordable.