Government says it cannot determine the amount of money it needs in the middle to long-term to turn around the country’s economy from its current vulnerable state where external developments continue to dictate its fortunes.
Speaking at a press conference yesterday in Accra on the state of the economy, Seth Terkper, Minister of Finance, said “the economy is already turning around even though the cost of living is too high for most Ghanaians.
“I think we can see from the numbers. This means even when our fortunes are going down, it is about planning to get out of that situation, and you cannot quantify it.
“How much did the US need to get out of the financial crisis and to do a turnaround which has eluded many of the advanced countries? In other words, the economic financial reforms and things that we need as Ghanaians to take us to middle income status and hopefully if we wish to, an advanced country status does not take away setbacks to an economy.”
Noting that growth alone would not take away setbacks to an economy, he said: “We know that once upon a time, powerful countries from Spain to Portugal to Ireland and Greece which never envisaged going to the IMF had to go to the IMF for a bailout.”
He stated that countries like Ireland put measures in place immediately and got out last year.
“So I think we should focus more on the instruments for managing our economy in good times and in bad times. I say this because what may hit your economy may not be on account of our performance. When commodity prices fall on account of demand slowing in China, you cannot control such a phenomenon. But you must build the instruments, the processes and the institutions to make sure that you can weather that storm. And I think for me, that is a very important yardstick, rather than competing with a certain situation that may or may not have prevailed.
“It is true that I may want to return an economy to a fast growth of 7 to 9.5 percent together with my cabinet colleagues and with the leadership of his Excellency the President. And mind you infrastructural development is a key one. So how much do I need? For as long as I need to develop rural roads, I need to build schools; I need to create jobs as an economy. And when I say I, I mean you and I as Ghanaians. It means that we must continue to develop the right management policies, otherwise you will be shut out from the market. So I think the focus is more important on the right instruments and the right tools at the right time.”
Mr Terkper added: “Much of what we are doing in the market is refinancing of the 2017 and the domestic bonds. And I think we should have that focus. As the deficit declines, we are not in the market with the principal goal that we had of financing the budget.
“It means that we must switch into the first gear and look at our debt and do more of refinancing. This is why the entire $1 billion last year was devoted to refinancing and not budget. We finance the budget domestically.”
From 9.3 percent in 2012, the GDP growth rate of Ghana recorded 3.9 percent for 2015.
By Samuel Boadi