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Business News of Monday, 12 December 2016


Economic hurdles welcome Akufo-Addo

President-elect Nana Addo Dankwa Akufo-Addo has succeeded on his third attempt at annexing the highest office of the land and much as he earned a few days of honeymoon in the process, he will soon hit the hard and tortuous road when he is sworn-in as President on January 7, 2017.

Having won the election on the back of voters' economic grievances, most of the challenges a President Nana Akufo-Addo-led government will confront are naturally economic.

These challenges mainly include paltry economic growth; widespread unemployment and underemployment, especially among young people; low productivity and wages; infrastructural deficits across most economic sectors; macroeconomic instability and vulnerability; as well as weak public finances and an unsustainable debt load.

One of the key campaign messages of the New Patriotic Party (NPP) has been the poor performance of the economy which was growing at 8.4 percent in 2008, as the NPP left power but now expected to grow at 3.3 percent, the lowest in 22 years, according to the IMF in its World Economic Outlook (WEO).

The slowdown in the economy was largely occasioned by severe power cuts which brought businesses on their knees forcing thousands of job cuts. The power cuts itself, popularly referred to as ‘dumsor’ was also a major blot on John Mahama’s administration having failed to solve it despite several promises.

Also Nana Akufo-Addo will have to contend with the ongoing IMF-programme which is helping the government to manage the economy under a three-year US$918 million Extended Credit Facility programme.

Even before Ghana went to the polls, the IMF told the B&FT that the conditionalities under the deal agreed last year is not likely to be renegotiated should there be a change of government. Nevertheless, the incoming Akufo-Addo-administration is expected to make overtures at the Washington-based lender regarding the deal which ends in 2018.

Given the overwhelming support of the electorate, the first budget and economic policy statement of the Akufo-Addo led administration will have to set out a credible, all-encompassing plan to address the myriads of challenges as well as implementing his own set of policies in order to give confidence to the electorate.

The NPP has maintained, through its campaign, that it will work to achieve a double digit GDP growth in the four years of its administration. According to the NPP manifesto, its main economic programme will enhance agricultural production and productivity, which last year recorded about below 5 percent growth.

Investment banker, Sampson Akligoh told the B&FT that it is important the incoming administration aligns the economy to real growth, lower taxes, effect timely payment of statutory funds and other payment areas, and allow the private sector to compete more equally.

The Akufo-Addo led administration, while dealing with the numerous existing challenges, would also have to dig deep into its acumen to deliver on several audacious promises such as the provision of a dam in every village in the three Northern regions as well as one factory in all 216 districts