Given the recent International Monetary Fund (IMF) program the government has undertaken and the improvement in the country’s economic indicators, there has been a general perception that Ghana is on its trajectory to economic recovery.
Financial Analyst, Dr. Wisdom Kofi Dogbey indicated that even though Ghana is making progress in its economic recovery journey, the country remains in crisis because the economy will take a while to recover. He indicated that the next government to assume power after the 2024 General Election will have the responsibility of ensuring a full economic recovery for the country.
He noted that for the country’s economy not to experience any recession in the future and to ensure that Ghana does not accrue debts after completing the current IMF program, the incumbent government and successive governments must be fiscally disciplined.
“There should be some form of structural reforms to promote productivity and enable competition in the economy. I am talking about measures to improve the business as a whole; encourage investment and strengthen the labor market”.
Dr. Wisdom Kofi Dogbey
Dr. Wisdom Dogbey further indicated that with diligent implementation of workable policy reforms, Ghana’s economy will eventually recover even though the recovery process might be slow, arguing that with commitment from the government, the country may achieve a growth projection of 2.3% after recovery.
Moreover, the Financial Analyst suggested that the government must establish rigorous Financial Hedging policies to mitigate interest rate risks incurred on loans, arguing that the current interest rate risks have increased Ghana’s debt to foreign creditors.
He also argued that Ghana is always vulnerable to the financial market because the country is not protected against interest rate volatility. “And if you borrow at a floating rate, the higher rate moves, the higher your interest payment portion will be” he opined.
Dr. Dogbey further suggested that the government must commit to solving the holistic debt problems of the country to ensure that resources that should be used to pursue developmental ventures are not used to pay off the country’s high debts caused by interest rate volatility.
Impacts of Policies on Economic Growth
Furthermore, Dr. Dogbey stated that Ghana must champion policies that benefit the country economically, indicating that the vast resources of the country can only be put to good use if there are good policies coupled with good implementation processes.
He noted that for economic prosperity to materialize, corruption must be dealt with, with a united front by the government and the general public at large while indicating that accountability must be demanded from leaders concerning their operations in public offices.
The Financial Analyst further stated that the government must leverage the use of Artificial Intelligence (AI) to improve development, indicating that AI can be used as a launch pad to turbocharge the country’s economy in sectors such as banking, production, and healthcare among others.
“AI is the most reliable engine today for innovation…it makes it easier to innovate through new product development in our new ways of service delivery and also creating very competitive business modules. The truth is with AI, some mandate processes that humans used to do will be done by a machine so yes, it can lead to job losses but it also creates some jobs”.
Dr. Wisdom Kofi Dogbey
He stated that AI improves productivity which leads to economic growth as it optimizes operations and gives a higher level of output while making fewer errors as compared to humans.
Conclusively, the inability of governments to maintain fiscal discipline over the years is one major factor that impairs the country’s economic growth and development. While fiscal discipline is imperative to Ghana’s economic growth, the tendency of leaders to engage in frivolous spending has been a major headache to the general public aside from the failure of Ghanaian governments to attain self-reliance over the years.
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