There is no denying the fact that the country is facing economic challenges which has necessitated calls for a rethink of the economic management model of the country.
And, for the first time in many years, inflation has become a clear and present danger for our economy, with the July figure hovering around 31 per cent.
In economic terms, growth is down and inflation is up. In human terms, people’s incomes are down and hardship is up.
There are root causes of this, the first of them being the COVID-19 pandemic which turned the economy and our lives upside down. And it is not over yet; there could be even more lethal variants of the virus that could prompt further disruptions.
Second is the Russian invasion of Ukraine, which has been devastating to the Ukrainian economy and sent shock waves across the globe.
To put it simply, we are facing a crisis on top of a crisis.
The question is: how can policy makers rein in high inflation and rising debt, while maintaining critical spending and building foundations for durable growth?
The answer, according to experts at the Graphic Business/Stanbic Bank Breakfast Meeting held last Wednesday, lies in the country living within its means (see the full story on our front page of yesterday).
The experts were of the view that the country had consistently found itself in deep economic crisis because it continuously spent far more than it generated, a development that always created huge fiscal deficits which had to be financed mostly through borrowing.
They advised that ‘living within our means’ should always be the guiding principle in the management of our economy.
The experts were the Director of Research at the Institute of Economic Affairs (IEA), Dr John Kwakye; the General Manager of the Venture Capital Trust Fund, Hamdiya Ismaila, and the President of the Association of Ghana Industries (AGI), Dr Humphrey Ayim-Darke.
The Daily Graphic supports the call to live within our means, especially now that our revenue generation has not been the best, having failed to meet revenue targets for the first half of the year.
Unfortunately, the bigger challenge is that due to the structural challenges of the economy, the production base is not growing, which has hampered the expansion of the economy. This situation always compels governments to try and maintain a fine balance and prioritise the needs of the people.
It has become evident from the past that most of the time we borrow to take care of recurrent expenditures and not spend on capital projects which have the propensity to generate income to defray the debt.
The government must implement measures to demonstrate a commitment to ‘fiscal discipline’ in an effort to appease creditors and credit-rating agencies.
It is important that it takes very bold and pragmatic measures that will ensure expenditure cuts and also make the right type of investments that will yield the necessary dividends and restore confidence in the economy.
The Daily Graphic believes the government must seize the moment now and bite the bullet to lay a firm foundation for economic take-off. There is the need for a decisive policy action that will ensure the recalibration of the economy.
Already, our ratings are not good, and the implication for the government and other companies going to the international financial market to borrow is effectively gloomy.
We must be seen to be proactive in taking the tough decisions to send the right signals to make our bonds attractive to foreign investors and also allow us some breathing space.
It is imperative that we get out of the hole we find ourselves in, and it must start first by prioritising our needs and making the necessary sacrifices.
We think the time has come for the government to engage the citizenry to initiate a national discourse on the need to live within our means. The discussions should be honest, frank and inclusive of all Ghanaians, irrespective of their political persuasion.
We are at a point where the national interest must supersede all parochial interests.