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His Excellency President Nana Akufo-Addo has to make crucial decisions in the next 90 days to help put the economy back on the path of recovery. That recovery period must have no or minimum room for errors. The public’s expectation is high and the government is expected to provide immediate solutions to Ghana’s unfathomable economic challenges.
The economic oratory of President John Mahama’s government was that, the economy has grown but the poor never benefited enough. Economic opportunity became uneven for many, resulting from the failure of the austere policy measures, or from the mismanagement of the economy. The luxury of bad economic governance is no longer an option to the public.
On the macro level, looking for solutions to our grim economic indicators is much expected. Also, the figures of our Gross Domestic Product (GDP), which the new government always challenged whilst in opposition, can foretell the partial picture of the depth and enormity of our plummeted economy. Therefore, quick-fix recovery could prove to be an unexpectedly difficult challenge.
Adding to these concerns is the recent admission by the immediate past Finance Minister – Seth Tekper- that government was to miss fiscal deficit reduction target in 2016 by 2%. That should heighten fears since Terkper’s ‘obsession’ for taxes could still not yield the much needed targeted results.
Ghana is potentially faced with the prospect of large and persistent future deficits with public debt stock reaching 70% of GDP – based on assumptions. The mountainous debt piled up by the past government is another serious burden and fears of uncertainty over how the debt can be managed whilst seeking double digit growth rate maybe a herculean task.
The question we ask is whether paying of interest on matured debts, stabilizing a fluctuating Cedi, tackling of the untamable inflation with a well-balanced policy rate to avoid high interest on loans for businesses, the economy withstanding external commodity price shocks and maintaining fiscal discipline as well as sustaining power for industries, can all be solved with one equation?
The country’s economy is wounded; it is a reason Nana Addo’s government plans to empower the private sector to boost growth. Helping and creating more industries would bring back investors’ confidence in Ghana’s economy to stem the politics of poverty for us to channel our strength into wealth creation.
Nana Addo reposing confidence in the private sector with a plan to cut down taxes and reduce interest rates will be a strategy to improve businesses access to finance. This would bring a wave of optimism to Ghana’s business sector to help increase productivity to pull the country out of its economic downward spiral.
The spillover will have a trickle – down effect in resolving the everyday issues of the poor. A quite number of Ghanaians living under the poverty line were overburdened by the previous government’s austere measure – cut in subsidies and taxes - thus draining money from their pocket.
Low income Ghanaians are the main beneficiaries or consumers of many subsidized public services therefore, any contrary plans likely to affect them is massively objected with protest reaching its crescendo. Such scenarios would increase pressure on the new government to abandon massive reforms in favor of the minor ones but if care is not taken it would be at the detriment of revenue hence, affecting fiscal deficit target.
The poor and the middle class see Nana Addo as their savior. They hope the decisions of the president will help the youth on the street, provide works for parents in various homes and also run the country well. It means it is not always about macro – economy but making sure that the benefit of micro – economy is also enjoyed at the grassroots level.
Make no mistake; time is not on the side of the new government. In the next 90 days, employing the appropriate model tools to tackle the economic challenge ahead is crucial for President Nana Akuffo Addo to meet his political promises to Ghanaians.
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