Consensus crucial in resolving economic challenges

BY: Daily Graphic
Consensus crucial in resolving economic challenges
Consensus crucial in resolving economic challenges

Last Monday, the Minister of Finance, Ken Ofori-Atta, presented the mid-year budget review to Parliament, during which he promised the government's commitment to a quicker turnaround in the fortunes of the economy.

Mr Ofori-Atta told the Members of Parliament (MPs) that the government was in the process of implementing key macroeconomic policies, including cuts to revenue and expenditure targets, to help consolidate the fiscal situation and regain market confidence.

He announced that growth enhancing programmes, social intervention initiatives and policies to mitigate the impact of rising prices on businesses and consumers would also be implemented in the bid to continually mitigate the impact of the crisis on the citizenry.

On infrastructure, he said the reconstructed Accra-Tema Motorway and Extensions Project, which is set to take off in September this year, would be tolled. The project, at the procurement stage, will be tolled to recover the whole life cost of the completed infrastructure, as well as pay lenders and provide a return for equity investors in the public, private partnership venture.

To rake in more revenue,the government is also expected to introduce an upfront payment of Value Added Tax (VAT) by importers not registered for VAT, effective October 1, this year.

Although a legal requirement, this mid-year review was significant for two main reasons.

First, it came at a time when the country is in preliminary discussions with the International Monetary Fund (IMF) for an economic support programme to stabilise the economy and quicken the recovery.

Second, it also came at a time when the twin challenges, the COVID-19 pandemic and the Russia-Ukraine war, have combined with domestic factors to worsen key macroeconomic indicators.

The two challenges have driven inflation to a 19-year high. The cedi has also lost about 20 per cent of its value to the US dollar, with the lack of market access for the perennial Eurobond sales having starved the Bank of Ghana of foreign exchange to shore up reserves and booster the currency.

Hopefully, Mr Ofori-Atta has assured the country that the government has a track record of navigating its way around challenges and called on the citizenry to have faith in a quicker return to stability.

“Mr Speaker, just as we did in 2017 and 2020, the government is resolved to continue to provide the necessary leadership to turn the economy around. Let me assure you, on behalf of the President, that we will do it again within the next two-and-a-half years. To do this, we will proceed with great caution, thoughtfulness, creativity and grit; as the adage says, we shall hasten slowly," the minister said.

The Daily Graphic is well aware of the challenges confronting the country and calls for increased efforts to insulate the citizenry and businesses in particular from the crisis.

While we appreciate the fact that it is a period for belt tightening, it is significant to note that those who lead must show the way.

Now is the time for the government and our leaders to cut needless spending, prioritise value for money and halt projects that are not critical to the economic recovery effort.

While we continue discussions with the IMF, with the hope of securing a bail out, it is important that we show to the fund and the world that we are capable of being fiscally disciplined, prudent in our spending and productive in collecting revenue due the state.

We also need to show a sense of togetherness, which is paramount if we are to surmount the challenges facing us. Now is not the time for political partisanship but sober minds and unalloyed collaboration to help rescue our economy onto the path of growth and fiscal consolidation.

Political talk and posturing by populists and moderates alike are not likely to solve many of the difficult economic challenges that now confront us. Unfortunately, our current politics too is not likely to save us, given the deep divisions along that line.

We need to adopt a bi-partisan approach to tackle the challenges. More work needs to be done to build bridges and forge together with a common voice to secure a more favourable deal