Restructuring Ghana’s economy requires political will
Professor Stefan Dercon, Professor of Development Economics, Centre for the Study of African Economies (CSAE), says the government needs to exercise political will to restructure Ghana’s economy.
He said that would require short term measures involving fiscal restraints such as cutting down on government expenditure.
“In the long term, the future looks bright but it’s the path to it that is complicated and politically costly for those in power. We just have to find a way to go through it. Ignoring it will definitely be the biggest mistake to make because that would stifle the ability to go to longer term growth,” he added.
The Professor gave the advice on Monday during a lecture on the topic: “Gambling on Development”.
It was organised by the Institute of Statistical, Social and Economic Research (ISSER) of the University of Ghana, Legon and CSAE.
Prof Dercon said the implementation of fiscal restraints would cause political issues because certain key sectors of the economy, such as infrastructure, among others, would be affected.
“Such stabilisation efforts will be tough but it’s now that these seeds have to be sown for a future better growth. It would involve cautious political behaviour with government budgets to make sure Ghana goes back to the period of remarkable growth since the 1990’s.”
“The success of a country is measured by its ability to correct errors in its economic policy. This won’t be easy. It would involve careful policy making, great communication by the leadership to the population. I’m optimistic that Ghana can make it happen,” he said.
However, he said, in doing so, they should be mindful not to fundamentally undermine the impact of such restraints on the “poorest” in society or “indeed what could be the engines of growth”.
He commended Ghana’s “early” move to the International Monetary Fund, adding that, the Fund acted as a useful external form of “correction” in cases when internal accountability could not deliver.