THE extent to which global developments negatively affect Ghana’s economy will depend on policies relating to agriculture, industrialisation, business development, trade and ICT, an economist, Prof. John Gatsi, has said.
He said the Russia-Ukraine war was not the cause of the fiscal and economic crises of Ghana but contributed to the already existing disturbing macro-fiscal developments before COVID-19 and Russia-Ukraine war.
He argued that this was because the country had not put in place a robust agricultural policy to ensure efficient production and perhaps, the export of the same.
“Russia-Ukraine war rather provides a portfolio of lessons needed to reform and revive agriculture and agribusiness policies with religious commitment instead.
“Over the years, we have not demonstrated in our policy-making behaviour that we appreciate that agricultural and agribusiness policies should be deliberately formulated to speak to issues relating to currency management (import-export relation), inflation and food sufficiency. The current Planting for Food and Jobs (PFJ) programme is not structured to accommodate import-export volatility of basic agricultural produce,” Prof. Gatsi, who is also the Dean of the University of Cape Coast School of Business, said at a dialogue organised by the Centre for Social Justice on September 6, 2022, in Accra.
The 11th Leadership Dialogue Series was on the theme, “Transforming Ghana’s Economy: Scapegoats, Root Causes and Hard Choices”.
Speaking on the theme, Prof. Gatsi said the economy was distressed due to the neglect of the potential of modernised agriculture, high unsustainable public debt, high- interest payment burden which was dwarfing financial commitment to other sectors, low revenue performance and inefficient spending, among other things.
He said the economic and financial crises the country faced today, with inflation at almost 32 per cent, a volatile exchange rate environment and a potential increase in non-performing loans, made citizens the scapegoats.
He said citizens bore the brunt of multiple levies and taxes, charges imposed on businesses to signal to the market about the readiness of the executive to manage the economic and fiscal crises.
“In debt management, with over 80 per cent debt to GDP ratio, mounting arrears, the government promises to ensure that there will not be any default on interest payment on loans because that may deepen capital market closure against the government.
“The real effect of scraping default at all cost is to sacrifice commitment to infrastructure development, goods and services for the public sector in the midst of more than 40 per cent food insecurity,13.9 per cent unemployment rate and high vulnerability among workers,” he said.
According to Prof. Gatsi, the economic transformation was a continuous long-term process of ensuring value addition to all sectors with the result of higher labour productivity, higher value-added outcomes of economic engagements and making industry and manufacturing responsive.
“To some, economic transformation is about structural change with illusive productivity gain, increase in gross domestic product, moving from agriculture to manufacturing. No Economy can remain static to address changing needs of society and provide the needed sound jobs for young people and provide space for genuine entrepreneurial engagement. The result of any transformation process is to improve economic management, leadership, livelihood, better business environment and create opportunities,” he said.
He added that quality leadership at all levels in both public and private sectors was a key requirement to transform an economy.
“An economic management setup that does not put a premium on a long-term master plan of a national character cannot deliver sustained benefits. Visionary leaders work with and are guided by a long-term master plan christened a long-term national development plan,” he said.