17 November 2011

Ghana: Economic Growth Should Reflect in the Well-Being of Citizens


Last Wednesday, Ghanaians once again went through the annual ritual of listening to the presentation of Government's Budget Statement and Economic Policy. As expected, views from sections of the society on the content of the budget are varied, with some hailing it as very progressive and offering hope to Ghanaians while others dismissed it as propaganda, purposeless and clueless statement.

According to the Finance Minister, the country has chalked remarkable successes in many areas of the economy and this is evidenced in some of the record breaking indices. These included significant reduction in the huge fiscal and external current account deficits that characterized the pre-2009 period; inflation dropping to single-digit levels; rising stock of international reserves to over three months of import cover; and stabilization of the exchange rate since August 2009, except for some minor volatility earlier in the year.

Real GDP growth has been very strong while the rebasing and revision of the national accounts saw the country's national income expanded by more than 60 percent, moving the country into a lower middle-income status.

"There has been a significant growth in real GDP from 4.0 per cent in 2009, to 7.7 per cent in 2010 and 13.6 per cent in 2011 on provisional basis, making Ghana one of the fastest growing economies in the world in 2011.

"At the end of 2008, the fiscal deficit on cash basis was 8.5 per cent of GDP (14.5 percent of GDP - old series). As at the end of September 2011, it had been reduced significantly to 2.0 percent of GDP."

Inflation which was 18.1 per cent at the end of 2008 now stands at 8.40 per cent in September, 2011. This single digit inflation, he maintained, was real and had been sustained for the longest period of our economic history, from June 2010 to date.

Dr. Duffuor said interest rates have continuously declined since 2009. This was evidenced by the significant reduction in the yield of the 91-day money market instrument from 24.67 per cent in 2008 to 9.1 per cent in September 2011, making it the lowest recorded money market rate in decades.

Gross International Reserves of US$4.98 billion recorded in October 2011 exceeded 3.0 months of import cover of goods and services, compared to reserves of US$2.0 billion at the end of December 2008.

But regardless of how these statistics appear attractive and glittering, they mean nothing to ordinary Ghanaians if they do not reflect in their lives by way of higher standard of living.

While not discounting the achievements, we urge the economic management team of the government to put in place relevant measures that will rapidly translate the growth in practical ways to the lives of the masses.

Labour is still agitating for higher salaries; some schools are still under trees; salaries of some health workers are still in arrears close to two years; there is the dire need for massive expansion in infrastructure to meet the growing school population, among others. It is only when such solution-oriented policies are implemented that a better Ghana Agenda budget will make meaning to ordinary Ghanaians.

We pray and hope that the theme for the 2012 Budget Statement and Economic Policy, Infrastructure Development for Accelerated Growth and Job Creation", will be made flesh come next year.

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