Let’s live within our means: former BoG Governor
A former Governor of the Bank of Ghana, Mr Alex Ashiagbor, has discarded any economic theory called ‘home-grown economic policies’, and explained that there is only one theory – “live within your means.”
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Speaking at the launch of a new think tank, Institute for Fiscal Studies (IFS), founded by Dr Kwabena Duffuor, the immediate past Minister of Finance and Economic Planning, Mr Ashiagbor said the prolonged fiscal deficits in the country’s successive budgets was a mark of indiscipline and reflection of the national lifestyle of the Ghanaian.
“If you don’t discipline yourself within the domestic economy, it will be imposed on you externally. So when the International Monetary Fund (IMF) officails comes , they will tell us what we should have told ourselves,” Mr Ashiagbor, who presided over Ghana’s first currency devaluation in 1979, said in Accra on November 17.
The economy has recorded consistent deficits since the late 1960s, with some of the largest deficits occurring in 2008 and 2012 at 14.9 per cent and 12 per cent of total value of goods and services produced within the economy respectively.
The government is currently holding discussions with the IMF for a programme which could rake in US$600 million to support the country’s balance of payments, crucial for ensuring currency stability.
The former governor said deficits were not unique to the country but should be the exception rather than the norm since its consistency, as in the case of Ghana, was worrying; it was an indication that people did not live within their means.
Dr Kwabena Duffuor, who has seen it all as a banker, Governor of the Bank of Ghana, and Minister of Finance, and made contributions to national development at the highest levels, founded the institute in March 2013, to contribute to the country’s economic development.
He wants the IFS, a non-profit non-political think tank, to research into relevant policy issues, analyse public finance and provide practical recommendations to the government.
It will rely on local professional economists for research, although it will draw on expertise and collaboration of its affiliation with similar institutes such as IFS of UK and Spain; Fiscal Policy Studies Institute, New Mexico, USA and the Fiscal Policy Institute, New York, USA. The Centre for Tax Policy and Administration, Paris, France and other institutes and centres in Kenya, Zimbabwe, South Africa as well as ISSER, IMANI and CEPA, all of Ghana.
Currently, the IFS is undertaking a comprehensive study of the management of the country’s economy since independence in 1957.
Motivation for IFS
The founder and president of the institute, Dr Duffuor, said he was motivated to set up IFS to make informed recommendations to help the economy of Ghana perform to expectation, given its rich resource endowment.
“In plain language, our fiscal and macroeconomic management have generally not done well. Our economic management decision-making and choices have more often than not been shaped by political expediencies and not by sound economic policies,” the immediate past Minister of Finance, who served for four years stated.
It will therefore be the mission of the institute to contribute to economic policy making and management in the country, promote better understanding of macro-fiscal management, build capacity for economic policy research and strengthening public finance management as a necessary precursor to improved social welfare and wider opportunities for all Ghanaians.
Membership
The IFS has a profound assembly of distinguished fellows for its council and executive committee.
The Executive Council is made up of the Founder and President, Dr Duffuor; Mr Ashiagbor, the Chairman of Council; Prof. Roy W. Bahl, Regents Prof. of Econs, Andrew Young School of Policy Studies, Atlanta, USA; Prof. S. K. B. Asante, a former UN Regional Principal Advisor; Prof. R. C. D. Franzsen, the Director of Africa Tax Institute, Univ. of Pretoria, South Africa and Nana Frimpong Anokye, a traditional ruler.
The list also has Rev. Dr Fred Deegbe of the Christian Council; Prof. Augustine Kwasi Fosu of ISSER; Mrs Kate Quartey-Papafio, MD of Reroy Cables; Mrs Felicity Acquah, former MD of Exim Guaranty Bank; the Executive Director, Prof. Newman Kwadwo Kusi; Mrs Rosemary Boahema Sahnoon, the Secretary, as well as two ex officio members, Mr James Klutse Avedzi, Chairman of the Parliamentary Finance Committee and the ranking member, Dr Anthony Akoto Osei. GB