The term “Building Back Better” has been increasingly and widely used in the context of the economic recovery from COVID-19 (WRI, 2020[) (We Mean Business Coalition, 2020). The notion originated in the context of recovery and reconstruction from physical disasters, with an emphasis on making preventative investments that improve resilience to, and so reduce the costs of, future disasters.
To “build back better”, recovery measures can be assessed across a number of key strategies. The Ghana’s Strategic Direction is to build back better is to achieve the envisaged transformation in post IMF, the strategic direction for the medium-term development policy framework will be to leverage Ghana’s natural resource endowments, agricultural potential and the human resource base for accelerated economic growth and job creation through value addition, especially manufacturing.
This will be underpinned by partnership with the private sector through PPPs to expand infrastructure by building roads and bridges; increasing electricity supply and reliability to support our economy’s needs; expanding access to good drinking water and providing quality healthcare for our growing population; improving sanitation and human security for all, and also transforming schools, colleges and universities to meet the demands of a new age with emphasis on mathematics, science, technology and innovation. The economic recovery in the post IMF could be assessed in the eight thematic areas.
First, in a short term, for Ghana to build back better post IMF we must be prepared to amend certain aspects of 1992 Constitution especially area of a Debt Cap or Debt Limit for instance the Debt to GDP ratio of 50% so that we can prevent future debt crisis as the current domestic debt exchange has basically destroyed both entire financial sector as well as Bank of Ghana. The debt ceiling is a limit on the total amount of government borrowing. According to OECD Policy paper 28 (2015), posited that for the emerging economies like Ghana the threshold should even lower at 30 to 50% debt of GDP as they are exposed to capital flow reversals.
The OECD economic policy paper (28) 2015 posited that the high debt beyond the Debt threshold, the government could undermine economic activities and destabilize the economy. Second, at higher debt levels, countries like Ghana could lose the accessibility to international capital markets and also lose market confidence that would see their borrowing rates increase steeply. In the case of Ghana treasury bills rates increased from 22% in 2022 to 32.5% on the yearly bills. To prevent future debt crisis, the government and the legislature ensure that the 1992 Constitution is duly amended and the Debt to GDP Ratio is explicitly enshrined.
Second, building back better post IMF, the country would require aggressive agricultural development strategies with the private sector, over the medium-term, with view to accelerate the modernization of agriculture and ensure its linkage (Creating The Needed Value Chain System) with industry through the application of science, technology and innovation. Agriculture contributes to 54% of Ghana’s GDP and account for over 40% of Export earnings, while at same time providing over 90% of the country’s food need.
Why should a country like Ghana bless with natural resources import Onion and Tomatoes from Niger, Burkina Faso, Mali and Nigeria it is incredibly shame and disgrace to our previous and current governments. Once upon Ghana used to export tomatoes, oranges and onions to Burkina Faso.
Third, build back better strategy the country requires that the country must adopt Economic Diversification from the Current Existing Mono-culture (Cocoa as the mainstay of the Ghanaian Economy). Ghana has to broaden its agricultural industry away from mainly cocoa to be one of the world’s biggest maize, and rice producers in Sub Sahara Africa.
Growth comes through structural change – a shift of economic activities from low to higher productivity areas that would help to overcome to overcome Ghana’s economic concentration and challenges related to job creation (M. Geiger. World Bank, 2019). Ghana’s over-reliance on the Cocoa sector makes it vulnerable to fluctuations in the global commodity prices. Therefore, the new strategy should seek to boost GDP growth by diversifying the economy and promote non-cocoa sector such as rice, maize, tomatoes and onions and aggressively promote the other non-traditional export products.
Fourth, as part of the build back better Post- IMF strategy the government must harness and strengthen the inflow of International remittances helps to stabilize the exchange rate, reducing the impact of currency fluctuations on the economy.
According to the Auditor-General’s Report on the Consolidated Statements of Foreign Exchange Receipts: Schedule of earnings from 23 authorized dealer commercial banks in the period between 2016 to 2022: Transfers – Inward Remittances US$ 1,837,506,014.80 in 2016 US$ 10,766,037,529.00 in 2017, US$1,021,916,059.59 in 2018.US$2,005,542,497.90 in 2019 US$2,310,586,691.47 in 2020 US$ 2,110,512,179.69 in 2021) US$2,121,081,266.78 in 2022).
However, World Bank remittance reports on Ghana from 2010 to 2022 showed marked discrepancies between their reports and the Bank of Ghana’s annual remittance reports recorded on Balance of Payments (BoPs). US$ 0.14 billion in 2010 or .8% of GDP; US$ 2.1 billion in 2011 or 10.8% of GDP; US$ 2.2 billion in 2012 or 10.3% of GDP; US $1.9 billion in 2013 or 5.9% of GDP; US$ 2 billion in 2014 or 7.6% of GDP; US$ 5 billion in 2015 or 20.3% of GDP; US$ 3 billion in 2016 or 10.8% of GDP; US$ 3.5 billion in 2017 or 12% of GDP; US$ 3.5 billion in 2018 or 7.3% of GDP; US$ 4.1 billion in 2019 or 5.2% of GDP; US$ 4.3 billion in 2020 or 5.2% of GDP; US$ 4.5 billion in 2021 or 5.9% of GDP; US $ 4.7 billion in 2022 or 6.1% of GDP.
The Ministry of Finance and Bank of Ghana must strengthen its procedures and processes of capturing global inward remittance data collection and analysis (including an assessment of the World Bank yearly remittance aggregates) to improve on remittance data and the need for the Bank of Ghana to adopt specific practical guidance on data sources and compilation methods to improve on the existing methodology to address the discrepancies between Bank of Ghana data and World Bank inward remittance data.