Economist, Eric Osei-Assibey, sees long-term benefits in the current administration’s industrialisation drive, arguing that the focus on production will sustain macroeconomic gains.
The senior Economics lecturer at the University of Ghana, Legon, says whatever macroeconomic stability that Ghana may achieve if the productive base does not expand, the gains will not be sustainable.
“You can bring down the fiscal deficit but if the economy is not growing for you to generate more revenue, you will have to keep borrowing and adding to your debt stock, interest cost and all of that come back to increase your expenditure without necessarily increasing your infrastructure,” he said.
The government hopes to increase employment and the production of goods and services with its One District One Factory industrialisation policy.
In the 2017 budget statement, some GH¢456.25 million in both capital and operating expenditures was allocated for the programme that was scheduled to begin in June this year but has been postponed.
Speaking on Hard Truth, a current affairs programme on the Joy News channel on MultiTV, the renowned economist said just like the industrialisation policy, the 2017 budget is rich in calculated efforts to offset government expenditure – a move he describes as a step in the right direction.
“This is one of the budgets that you could see very deliberate policies towards the real sector of the economy, like policies that are geared toward bringing in investments in the productive sectors of the economy,” he said.
Dr Osei-Assibey sees a bump in Ghana’s foreign currency when the factories start production but he wants the government to actively involve the private sector.
“The way the private sector responds is key, and hence the business-enabling environment must be conducive to make it attractive enough for businesses to invest,” he said.
Watch more in the video below.