Economists worried over Akufo-Addo’s ‘silence’ on job creation

Business News of Sunday, 23 July 2017

Source: newsghana.com.gh

2017-07-23

President Nana Addo Dankwa Akufo Addo ShotPresident Akufo-Addo

Dr Paa Kwesi Nduom, Group Chairman of Groupe Nduom and a renowned politician has expressed dissatisfactory over the government’s inability to create jobs for the youth since assuming helm of affairs of the country.

Also, Dr John Gatsi has said, he was extremely surprised when the President could not speak to job creation within six and half months of managing the economy especially when the theme of the 2017 Budget boldly printed on the cover page is “Sowing the Seeds for Growth and Jobs”.

He added, also when the government promised about 750,000 jobs through planting for food and job programme launched early this year.

However, on the question of borrowing, Gross Domestic Product (GDP) and deficit and statements in the national budget, Dr Gatsi has caution elements of the current government saying, “there is the need to be careful as budget statements are projections and not actual performance.”

“To say for instance we have reduced the deficit to 6.5% in the Asempa budget and GDP is around GHC200 billion is misleading. There are allocations to various ministries and some have not received any actual disbursements. The GDP projection for 2017 is around GHC203.4 billion and gain quoting this as if is the actual, is problematic.

“The debt stock has gone up because we have borrowed to Finance deficit and therefore our borrowing is not smart borrowing. Debt to GDP will only reduce marginally though GDP assumes upward trajectory the reason is simple we have borrowed unreasonably very high. We should bear in mind we have a lot of debt repayment from 2017 to 2021 when most of our recent bonds are due for payment. We do not pay debt to GDP ratio it is only a relevant indicator. We are going to pay the debts we are accumulating with speed with actual revenue so we cannot hide. Greater portion of the borrowing within the first halve of the year appear to be for consumption,” he noted

It is unfortunate that the reduction in the policy rate together with lower Treasury bill rate is not yielding reduction in lending rate, the economist stressed.

He explained that, lower Treasury bill is supposed to serve as benchmark rate for other interest rates. But this is not the case. Dealing with non-performing loans and payment of arrears are necessary to activate response from banks to reduce lending rates.

Dr Gatsi, who has earlier in the interview said, “I’m not interested in awarding marks for today’s, meet the press by the President and his team l will rather focus on the key observations.

The president seems to appreciate all his appointees and therefore added some positive adjectives to their names for example Hon Ada an experience minister and Dr. Bawumia a competent Vice President. This approach is positive.”

Apparently on the IMF program, Dr Gatsi corrected the erroneous impression by the government that as if nothing has been changed in the terms.

He corrected that, “the IMF programme has already been extended from April 2018 to December 2018. The reality is that with or without IMF programme most MMDAs are under budget and underfunded and very soon some maybe incapacitated to deliver public service. It is also possible that most of our sensitive public service delivery entities such as Training colleges, hospitals, Food and Drug Authority and Standard Authority maybe without cash and accumulate new debts for taking relevant supplies on credit. We must improve and diversify our revenue generation.”

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