Economic and Policy Analyst, Senyo Hosi, has blamed government, regulatory bodies in the financial sector and market players such as banks for the current macroeconomic crisis facing the country.
Speaking on norvanreports’s Twitter Space Conversation dubbed “Ghana’s Looming Financial Crisis: Local or External”, Mr Hosi averred failure on the part of government, regulators and market players caused the current crisis, further asserting the current crisis is self-inflicted.
Mr Hosi blamed banks for instance, for lending too much to government despite visible signs of ballooning debt with the excuse that government securities are risk-free.
“If banks had stopped investing in government securities and said because government’s debts are unsustainable, government would have stopped borrowing, but no, that was not done (sic),”he remarked.
“And for the regulators, they also failed to whip issuers such as the government in line, they have not been able to keep government in check.
“Government has also not been disciplined enough, it has not rationalized expenditure and made it efficient, it keeps borrowing and borrowing. All these have come together to cause the present economic mess,” he added.
Speaking on the way forward, Mr Hosi posited that the country needs to have a national consensus on an economic strategy to get out of the current economic crisis.
But according to government and as outlined in its 2023 budget statement, there is such a national economic strategy premised on seven measures which government believes will restore macroeconomic stability and accelerate economic transformation post the Covid pandemic and amid the ongoing Russia-Ukraine war, which it blames for the current economic crisis.
Per the Finance Minister, the 2023 budget reflects government’s resolve to reset the Ghanaian economy.
According to the Finance Minister, the seven measures aimed at restoring macroeconomic stability and as articulated in the country’s Post-Covid-19 Programme for Economic Growth document (PC-PEG) include;
- Aggressively mobilize domestic revenue;
- Streamline and rationalize expenditures;
- Boost local productive capacity;
- Promote and diversify exports;
- Protect the poor and vulnerable;
- Expand digital and climate-responsive physical infrastructure; and
- Implement structural and public sector reforms
“To achieve these, there are three (3) critical imperatives: successfully negotiating a strong IMF programme; coordinating an equitable debt operation programme; and attracting significant green investments.
“This will enable us to generate substantial revenue, create needed fiscal space for the provision of essential public services and facilitate the implementation of the PC-PEG programme to revitalize and transform the economy,” said the Minister while presenting the 2023 budget in November 2022.