Professor Lord Mensah, an economist and senior lecturer at the University of Ghana Business School (UGBS), has expressed support for the 24-hour economy policy proposed by John Dramani Mahama, the flagbearer of the National Democratic Congress (NDC).
This policy aims to introduce a 24-hour economy with incentives and tax breaks for manufacturers who will run extra shifts to create more employment opportunities and boost production and services in the country.
“Our economy is fully dollar-denominated. How do we reduce it? We need production. We need an economy that can produce and bring in more dollars and the 24-hour economy should be targeted very well in certain key areas. It should be able to bring us more inflows and that will stabilize the currency. The 24-hour economy is the best sellable policy as we speak now if you look at the current state of the Ghanaian economy.”
Professor Lord Mensah, Economist and Senior Lecturer, UG
In addition to the 24-hour economy policy, Prof. Mensah also addressed fiscal policies, pointing out that heavy government borrowing has stifled individual lending. He recommended minimizing budget deficits to encourage banks to lend more to individuals.
Prof. Lord Mensah critiqued Ghana’s reliance on the Euro Bond market, arguing that it has made politicians complacent and hindered export-driven policies. He warned that the ease of accessing international markets has harmed the economy, leading to the sacrifice of export-driven policies for quick Euro Bond money. This critique underscores the need for a more balanced approach to financing, focusing on sustainable growth and exports rather than quick fixes.
Prof. Lord Mensah advised careful borrowing, noting the importance of balancing growth potential and debt levels. He argued that there is always a threshold when borrowing, and when the rate at which you are growing your debt is more than the interest that you are paying, you have to stop borrowing.
Prof. Lord Mensah emphasized the importance of minimizing budget deficits to encourage banks to lend more to individuals. He argued that heavy government borrowing has stifled individual lending, suggesting that a reduction in budget deficits could stimulate lending and economic activity. This approach is supported by the International Monetary Fund (IMF), which often advises countries to reduce their budget deficits to improve their financial health and stability.
“The true state of the Ghana economy is an economy that is in debt, is an economy that all the inflation numbers that we are recording are partial not the true state of the Ghanaian economy. The reason why I am saying this is that we have suspended our external debt payment since 2022. ”
Professor Lord Mensah, Economist and Senior Lecturer, UG
Additionally, Prof. Lord Mensah urged the government to seriously commit to Ghana’s energy transition plan to deploy infrastructure and technologies that will ultimately reduce the importation of fuel, which continues to hurt the exchange rate. He lamented the lack of alternative transportation infrastructure that could balance the transportation sector and control the exchange rate.
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