Both the Convention People's Party (CPP) and the Danquah Institute (DI), after dissecting the economy, have come to the conclusion that things are not going well, and therefore, called for a radical change to breathe life into it.
Whilst the CPP argues that the failure of fiscal austerity measures to control inflation for the past 32 years has been experienced by all Ghanaians, and that it was time to reject fiscal austerity as the policy to control inflation in the long term, the DI also thinks the way the government has resorted to borrowing was not the best way to address the economic challenges facing the country.
The following are the reports explaining the detailed position of the two institutions.
The Chairperson of the Convention People's Party has challenged the government to raise the standard of living of the ordinary Ghanaian, by adopting prudent economic policies, and rejecting policies that over-emphasise fiscal austerity as the means of inflation control.
In what can be described as a comprehensive policy statement of the CPP on the economy, delivered at a meeting with executives of the Trades Union Congress, Ms Samia Nkrumah lashed out at successive NDC and NPP economic policies, and said they had failed to deliver the promised economic benefits.
"The failure of fiscal austerity measures to control inflation for the past 32 years has been experienced by all of us," she said, and added that it was time for the country to "reject fiscal austerity as the policy to control inflation in the long term."
"This is because the trade and budget deficits do not, by themselves, cause inflation. The underlying cause of inflation in our economy is low productivity in agri-business, and shortfalls in export earnings. It is these that cause the deficits in the first place," the CPP Chairperson explained.
She argued that the country's development partners, who prescribed for Ghanaians the policy of fiscal austerity and a focus on inflation control as our growth strategy, pay primary attention to employment creation in their economic development management strategy.
"They know that inflation is not a necessary consequence of employment creation, or that in the short to medium term, a certain rate of inflation should, or, can be tolerated for employment creation.
"As we speak, Mr. Bernanke, Head of the Federal Reserve Bank of the United States of America, is pouring easy money, referred to as quantitative easing (QE), into the American economy until the unemployment rate reduces to an acceptable level. He does not anticipate an unmanageable inflation rate as an outcome of his policy," she stated.
According to Samia Nkrumah, the country's trade liberalisation policy restrains the growth of the manufacturing and agricultural sectors, and was, therefore, the major cause of unemployment in the economy.
"The policy makes us dependent on imports, and it is largely the cause of our trade deficit and pressure on the value of our currency and exchange rate. Our government is compelled to borrow from international financial markets to support a largely consumptive national budget, and intervene in the foreign exchange market to support the value of our currency, and maintain an exchange rate that becomes increasingly unsustainable."
She said countries that choose to allow their currency to drop, so that they can remain competitive, retain the capability to sustain and expand production capacity and increase export earnings, in an effort to close or erase the deficit,
She added that the strategy of NDC and NPP governments had been to borrow to support the exchange rate and a largely consumptive national budget, and top it up with a cut back in growth expenditure to bridge the deficit.
"This policy contracts the economy and just postpones the day of reckoning of an economic, financial and political tsunami, if and when our creditors refuse to lend to us or give us aid that will be inadequate, anyway, by any measure," she warned.
She said the important question is why Ghanaian governments choose social protection expenditure cut backs, and borrow to support the falling cedi, when they have the option to maintain a realistic exchange rate that truly mirrors the country's economic performance, which enables domestic production to compete with imports, and is generally consistent with the country's development objectives.
According to her, unlike the NPP and NDC, the CPP does not accept that the Structural Adjustment development policy of stabilise, privatise, and liberalise is a growth and development formula. "They are also, in our view not an end in themselves. They are means to an end that must be guided by inclusiveness, experimentation, common sense and pragmatism," she added.