Consult widely before implementing initiatives - chartered economists
Some Ghanaian economists have urged the government to strictly adhere to prudent financial management in rolling out its industrialisation and agricultural policies.
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The Institute of Chartered Economists of Ghana (ICEG) said the weak economic fundamentals demanded that the government spent only within its budget.
“In the medium to long term, the planting for food and jobs, as well as the one district one factory programmes is laudable but extensive stakeholder consultations are required to make them practicable,” the Chief Executive Officer (CEO) of ICEG, Mr Gideon O. Amissah, told the Daily Graphic.
He granted the interview in Accra after he presented a report on the performance of the local currency against major foreign currencies for the first quarter of 2017.
The report, titled “The performance of the cedi: a reality or a mirage,” stated that “the fiscal regime vigilance is required in the implementation of the 2017 budget to avoid possible high fiscal deficit, hence restrictive fiscal policy will be recommended in terms of budget implementation caution.”
Details of the report
Explaining further, Mr Amissah said it was important to roll out active monetary policies that would spur the growth of the private sector, as well as prudent application of foreign exchange reserves.
The report looked at a comparative analysis of the performance of the cedi against major foreign currencies for the first quarters of 2016 and 2017.
For the first quarter of this year, for instance, it showed that the local currency cumulatively depreciated by 2.60 per cent against the dollar to settle at GH¢4.31 per dollar from GH¢4.20 per dollar.
“However, the cedi recorded roughly 4.66 per cent and 5.54 per cent depreciation against the Pound and the Euro respectively,” the report added.
The report projected that “the outlook of the cedi against the Pound Sterling is favourable to end the second quarter with an approximation of 0.71 per cent appreciation. The cedi is likely to appreciate against the Pound Sterling in April but will depreciate in May and bounce back in June to close the quarter.”
Diligence
Mr Amissah observed that based on the volatilities in the local economy, the government ought to do due diligence in rolling out its industrialisation and agriculture policies in a cost-effective manner.
Dollarisation
He also urged the managers of the economy to direct their attention towards addressing the increasing dollarisation of the economy, especially in the hospitality industry and private universities.