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Opinions of Friday, 14 February 2014

Columnist: Addo, Jake

Ghana’s economy not in crisis

By: Jake Addo

The politicizing of the depreciation of cedi against the dollar is unfortunate and unnecessary, and dose nobody no good. The reason why the cedi is falling against the dollar is known to all who care to Know. Inflation is a result of too much money chasing too few goods; and in the same vain the depreciation of the cedi against the dollar is too much cedi chasing to too few dollars. Too much cedi chasing too few dollars(the cedi falling against the dollar), or too much money chasing too few goods(Inflation) which causes the cedi to decline against the dollar, is a result of how governments allocate and reallocate national resources.

Inflation or the devaluation of the cedi is being caused by increase in salaries and wages without an immediate or corresponding increase in production of goods and services. The periodical demand of increase of wages and salaries by workers, which is their lawful right, is one reason why the cedi falls against the dollar. You denier the workers that right and you are faced with paramedical staffs and teachers laying down their tools, which results in children going out of the classrooms and patience dying in the hospitals. The youth in agriculture policy which has been embraced by both the NDC and NPP is another waste. It would have been more profitable if we construct roads to cocoa producing areas where farms already exist, to give the farmers access to market and buying centers, so that food crops and cocoa don’t get locked up and get rotten in the hinterlands, whiles we waste our energies on farms whose success we are not sure of.

To be able to invest one must be fugal save and accumulate. Investment means sacrificing what you can enjoy today for a better tomorrow. In Ghana the Kwawu trader is perfect example including all persons who make success in business. Some nations lend and some borrow. Those who lend to others are those who are able to accumulate surplus by taxing their people. Taxation is like waging a war on your people which can have serious and damaging consequences if care is not taken. To be able to tax your people requires discipline, strong moral fiber and the tenacity of purpose.

Those governments which cannot win the war against their own people cannot win against other nations; and therefore go ‘aborrowing’ and go ‘asorrowing’. Those governments who are able to squeeze their own people and accumulate surplus do so in order to invest in their own countries or other countries. So if the Japanese, the Chinese or the American lends you money he is doing so because of profit both in kind or in cash, interest or jobs for his people and not your people. What we need to do is to emulate them and not to insult nor condemn them.

China is the largest exporter of goods and services followed by the USA. She is the second largest importer after the USA. China has the largest surplus followed by Japan. However China’s minimum wage per hour is 0.8 dollars, compared to the USA is 7.25 dollars, Japan 8.17 dollars, South Korea 4.31 dollars, UK 9.83dollars. You can see the extent to which China taxes its workers. They do that to create new jobs for the unemployed in China and elsewhere for the Chinese people.

If we want to create jobs for our people then it must be with monies that we have accumulated by taxing our workers to create jobs for the unemployed. Ghanaians think that an improved or growing economy or expanding economy must reflect in their pockets. This is not always so. A growing and expanding economy is one where jobs is being created for more and more people and not putting money in to the pockets of those who are already working, but rather putting money in the pockets of the unemployed by creating jobs for them. Sometimes you need to reduce the purchasing power of those already working to create jobs for the unemployed.

China has become a threat to every economy in the world because of its stringent measures. If they go on the way they are going they will surely overtake the west.

We need to be patient with the government. The economy is not in crisis. It is only readjusting due to high wage bill and taxes needed to meet the infrastructural needs of the country.

Jake Addo is a management consultant and Chairman of the Site 18 Branch, Tema East Constituency of the National Democratic Congress (NDC).