An economist and research fellow with the Institute for Fiscal Studies (IFS), Dr. AduOwusuSarkodie, says Ghana’s fiscal outlook has not been impressive even before the global pandemic.
The 2021 budget envisaged a fiscal deficit of 13.9 percent of GDP in 2021, including energy and financial sector costs, and a gradual medium-term fiscal adjustment which would support a decline in public debt starting in 2024.
However, this outlook is subject to significant uncertainty, including from new pandemic waves and risks associated with large financing needs and increasing public debt, per the IMF Executive Board Assessment.
Directors commended the Ghanaian authorities for their proactive response to the COVID-19 pandemic, which mitigated its economic impact, but contributed to a record fiscal deficit and increased public debt vulnerabilities.
Commenting on Ghana’s economy in general, Dr. AduOwusuSarkodie in an interview with Accra-based KasapaFM said: „The fiscal position of Ghana is very bad insisting the pandemic has just exacerbated the problems.“
„The economy in pre-covid levels wasn’t the best. We were struggling long before the global pandemic. It only worsened our case amidst Covid. It’s just like a weak tree that cannot withstand nature’s forces,“ he told host BonoheneBaffuorAwuah on Ghana Kasa.
Meanwhile, Dr. AduOwusuSarkodie, intimated that establishing a vibrant manufacturing sector is a powerful engine of growth and development, but the nation is, unfortunately, struggling with its industrialization drive.
„If we open up industrialization, the potential gain will be huge. There are several benefits that accrue to this. One, the sector creates jobs, and can thus translate into a substantial source of income for the rapidly growing population. If you build a typical factory, you’ll get a manager, accountant, cleaner, security, and technician among others. If we replicate this in all the districts, and the regions, the economy will boom.
„But unfortunately, we’re nowhere with our industrialization drive. The government’s 1D1F is impressive, albeit very slow. Out of about 216 districts, we have accomplished less than 100. So we need to step up.“