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General News of Friday, 5 April 2019

Source: Myjoyonline.com

State of Economy: Decide on the facts, not the politics - Economist admonishes

Focus on the facts for your economic choices, not the political rhetoric, an Associate Professor of Economics has urged, following varied political verdicts on the state of the economy.

Dr. Eric Osei-Assibey said it should be obvious to even the disinterested observer that the facts of Ghana’s economy points to a state of macroeconomic recovery, a situation he insists the IMF has attested to.

“I as an economist will always look at the facts, I look at the evidence, and I look at numbers to actually pass judgment on an economy because politicians will always have their way and their say,” he said on the Joy FM’s Super Morning Show Friday.

Osei-Assibey’s remarks seek to settle Ghanaians who might have been unsettled by the trading of accusations by senior members of both the NPP and NDC.

Following a distressed economy, Ghana entered into an International Monetary Fund Programme in 2014. After five years, it exited on Tuesday.

At the Wednesday Town Hall Meeting by the government’s Economic Management Team, the Vice President said Ghana went to the IMF because of bad management of the economy managed by the erstwhile National Democratic Congress government.

“Debt pileup began, debt service became burdensome on the budget, inflation soared, external trade balances worsened and the economy became more and more vulnerable to external shocks.

“This poor state of public finances, weak policy implementation and lack of policy credibility resulted in Ghana requesting an IMF bailout in August 2014,” Dr. Bawumia told his audience at the College of Physicians and Surgeons.

But this has been disputed.

At the meeting by the Coalition for Restoration Thursday, Bolgatanga Central Member of Parliament said this economy is on life support as it has been propped by excessive borrowing.

“In 2018, we went to borrow $750 million and only $119 million was spent on capital expenditure and 631 million dollars on consumption. Our children will have to pay for this and they have nothing to show for it.

“No wonder they were celebrating with kenkey and fish. The kenkey will end up in consumption. It will end up here with our Eurobonds,” Isaac Adongo told the gathering of NDC supporters composed of former government appointees.

In the midst of the confusion, the economist, Osei-Assibey said Ghanaians should let the facts decide.



What are the facts?

The Economy grew 8.1% in 2017, Non-oil growth increased from 4.6% in 2016 to 5.8% in 2018 and Agriculture grew by 6.8% by 2018.

These facts he said points to a recovery of the economy.

“There is no doubt that this economy is recovering from a very difficult situation. We had to go to the IMF because of some difficulties we experienced over the last four to five years.

“There seems to be some turnaround on the macroeconomic front,” the lecturer advanced.

But more than a fixation on the macroeconomic indicators, he has called for policymakers to pay attention to the microeconomic indicators since those affect the lives of the ordinary people directly.

“You must also look at the microeconomics and see the extent to which there is development because at the end of the day that is what matters to the ordinary Ghanaian.”

This explains why he is excited about the growth in the agriculture sector, noting it affects ordinary people but insists that the full effect of such growth can be felt if it is sustained over a long period of time.