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Opinions of Saturday, 28 June 2008

Columnist: Agbodza, Kwami

Re: Economy is on track - Akoto Osei

In the General News of Tuesday, 24 June 2008 an article with this title appeared in which Dr. Anthony Akoto Osei, Minister of State at the Finance Ministry, gave a positive assessment of the economy, saying the second half of the year held much prospect for the country.

Clearly, Dr. Akoto's announcement is calculated to promote the NPP's political merchandise in their Duopolistic political free market bid to govern Ghana for another four, possibly eight, years.

The stability of inflation-reduction, most remarkably, as a macroeconomic policy, does not seem to be as important any more. It is now described merely as a “damper”; except of course, should Trade Unions ask for higher minimum wages, when suddenly the effect of inflation will not be described as a damper any more.

Even if the country's fiscal and current accounts position would show much improvement in the second half of the year, the central question which Dr, Osei failed to address is what the impact will be on the standard of life of the ordinary Ghanaian.

The fiscal and current accounts position cannot in any sane political party be more important than the material economic circumstances of the people, their day to day economic experiences and the state of their consciousness. Except of course in lawless free market liberal-conservative political parties.

It is not enough to make vague positive macroeconomic statistical predictions based on subjective confidence about the cost of living especially when you are a nonentity in the bigger scheme of things that include an independent central bank to say the least. For after all, the concrete cost of living of the Ghanaian Minority who earn the majority of our national income is different from the cost of living of the concrete 80% Ghanaian Majority.

Without the income to spend, and living in income-poverty, the good-intention of serial Free Market lies and price reduction is no consolation.

So assuming Ghana's growth target is kept tight; assuming that measures to enable Ghanaians cope with the rising cost of living as a result of increasing oil and food prices work their way quickly through the economy; assuming that from July 1, the high voltage consumers pay higher tariffs; assuming that government enjoys enhanced divestiture receipts; assuming that relevant measures cut down significantly on crude oil imports and lead to enough savings to help the fiscal position and conserve foreign exchange and reduce the pressure on the Ghana Cedi; assuming that the oil import bill reaches 2.5 billion this year; assuming ceteris paribus all these happen; the central question is how these quantitative economic processes will lead to an increasing standard of life of the Poor Ghanaian Majority in their poverty disposition.

Dr. Osei, a conservative through and through laced with an arrogant contempt for the ordinary man, fails to address this central question Ghanaians should have been told.

The purpose of macroeconomic policy certainly must be its policy impact on the microeconomic welfare outcomes of all Ghanaians. But then only progressive Nkrumaists like Ndoum understand this basic premise.

Most astounding of all, and above all, perhaps a veritable Freudian slip, Dr. Osei says he is confident that the various measures being undertaken by government would lessen the impact of the current economic hardships on the budget. The BUDGET!

In other words, the Finance Ministry is more interested in the budget, on which they report to the External Free Market Agencies, than the welfare of Ghanaians.