Reduce spending to save economy — Kenneth Thompson
The Chief Executive Officer of the Dalex Finance and Leasing Company Ltd, Mr Kenneth Kwamina Thompson, has identified over-expenditure by the government as one of the major challenges of the country.
He said over- expenditure, which was not peculiar to the current government alone, had resulted in excessive borrowing by successive governments over the years, quoting the Monetary Policy Committee of the Bank of Ghana that Ghana was broke.
Speaking at a lecture organised by the Chartered Institute of Marketing, Ghana (CIMG) on the topic, "Crystal ball gazing: The Ghanaian Economy in 2015", Mr Thompson said Ghanaians had been living above their means for years now”.
He said for instance that the income during 2013 for the country was GHc13.9 billion, and the expenditure was GHc21.2 billion, describing it as "reckless spending" and an indication that “Ghana is broke.”
Touching on the IMF bailout, Mr Thompson was hopeful that by the end of the first quarter of the year, the deal between the fund and the government would be signed.
He warned that the deal would come along with certain painful decisions by the government because of the conditionalities attached.
He said the decision by the government to engage in domestic borrowing was an attempt to crowd out the private sector from borrowing.
Mr Thompson said such a practice was injurious to the private businessman because of its tendency to increase interest on borrowing.
Touching on inflation, Mr Thompson said the recovery of the US dollar was putting pressure on the cedi.
He said there was fiscal indiscipline on the part of government and further predicted that borrowing would continue.
Mr Thompson called for more financial discipline on the part of the government, "if not we are heading for a crash."
He called for a complete change of mindset and the political will to be able to address the challenges confronting the country.
Mr Thompson said the continuous preference for imported goods and items to the locally-produced ones was collapsing local industries, pointing out that it was more economical importing finished products into the country than producing them locally.
He said it was good for the President to call for the patronage of made-in-Ghana goods, but that making the call alone was not sufficient, and added that "until diet coke becomes more expensive than 'sobolo' we aren't going anywhere"
The President of the CIMG, Dr (Mrs) Shola Safo-Duodu, said the vision of the Institute was to promote the theory and practice of world-class marketing in the country hence, the need for world-class marketing professionals.
She said it was CIMG's mission to play an advocacy role so that it would push government and officials in the right direction as far as marketing was concerned, "so, today's programme provides us with an opportunity to meet our aim."
Contributing to the lecture, the participants identified the preference for foreign goods as what was fuelling the economy of those countries to the detriment of the local economy.
They denounced the opulent lifestyle of Ghanaian politicians in the midst of serious economic challenges facing the country.
They believed that it was the responsibility of the government to encourage local industries to grow and ensure that laws were in place to protect local manufacturers.