Vice President, Dr Mahamudu Bawumia, has concerted that achieving fiscal and debt sustainability will not be an easy task for government.
According to him, attaining sustainability will require very bold, difficult but firm decisions. He revealed that government cannot address the current economic crisis without addressing the fiscal and debt sustainability.
Additionally, he stated that not much can be done to salvage the situation without also addressing the production side, foreign exchange regime and “what allows us to lose a lot of foreign exchange”.
Dr Bawumia made this revelation at the opening of the StanChart Fintech festival on how to use technology to propel growth in the financial sector, today, October 26, 2022. The festival is part of the discussions the government is having with the International Monetary Fund (IMF) for a programme.
More importantly, he stated that if government is going to address the challenges, the economy must be digitalized and that is something the NPP administration has started since 2017.
“Restoring fiscal and debt sustainability is not going to be easy, it will require very bold, difficult but firm decisions. I think these are part of the discussions that we are having with the IMF and I am sure once these are concluded, it will be clear that it will not be and it should not be business as usual, because we have to adjust to the new global and domestics realities.”
Dr Mahamudu Bawumia
The Vice President stated that what Ghana is witnessing means that the nature of production needs to change. This, he explained, is because the country over the last five years, although has had more trade surpluses, has had these “trade surpluses on our balance of payments”.
“This is like the first time in about twenty years that we have had consistently, about five years of trade surpluses on our balance of payment, at the same time we are having a lot of current account deficits. Which means that, a lot of the foreign exchange that we are earning from our trade doesn’t stay in Ghana.”
Dr Mahamudu Bawumia
Addressing import dependency in the country
Dr Bawumia underscored that local production is one of the areas government need to critically look at and address to reduce the country’s import dependency. He stated that there is a very high dependency but as the global economy is going to realign to the new reality with more self-reliance, Ghana cannot be left behind.
“There is so much when you look at the broad spectrum, from toothpick to tomatoes to rice and maize… We also have to look very closely at how we enhance domestic production and reduce dependency on imports for commodities that we can very easily produce here in Ghana.”
Dr Mahamudu Bawumia
Proffering more solution, Dr Bawumia expressed the need for government to look very closely at the country’s foreign exchange regime. He noted that the regime is “quite loose” and that is why government is instituting measures to see how best it can tighten the foreign exchange regime.
“Of course, I think that some of the details around some of these pillars I am talking about, when the President addresses the nation hopefully by the end of the year, some of these details will be fleshed out in more specifics.”
Dr Mahamudu Bawumia
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