Ghana must work out own salvation

By Edmund Smith-Asante, ACCRA

Dr Mahamudu Bawumia at CUC

Dr Mahamudu Bawumia, a Visiting Professor of Economic Governance, Central University College (CUC), at Miotso, near Tema, has called for the government to put in measures that will prop up the economic fortunes of the country other than seeking external help.


Listing the litany of woes plaguing the country, Dr Bawumia, who is also the running mate of the New Patriotic Party (NPP) flag bearer, Nana Addo  Dankwa Akufo-Addo, said, “What we should recognise is that economic policies and the responsibility for their implementation is ultimately that of the government.”

Speaking on the topic “IMF Bailout: Will the Anchor Hold?”, he stated; “The IMF can design the best policy framework for you and if you mess up the implementation, the country can end up in a mess.”

Dr Bawumia was the speaker at the fourth in a lecture series held by the CUC, dubbed the “Distinguished Speaker Lecture Series.” It was the second time the former deputy governor of the Bank of Ghana (BoG) was delivering a lecture at the series.

His first lecture was at the second in the series on March 24, 2014 when he spoke on the topic, “Restoring the Value of the Cedi”, at which he predicted that Ghana might seek an International Monetary Fund (IMF) bailout if prevailing conditions persisted.

After Dr Bawumia’s prediction came true, he was once again called by the university to deliver a lecture on the IMF bailout, which sought to find out whether it was the answer to Ghana’s economic woes.

Working out own solutions

However, after presenting the country’s economic outlook as a gloomy one, the former BoG deputy governor outlined some steps that needed to be taken by the government to rescue the plummeting economy, saying, “At the end of the day, we have to do it ourselves.”

He listed steps that needed to be taken as dealing with corruption, restoring debt sustainability, restoring and prioritising public expenditure with a transparent budget process, increasing tax collection and strengthening the effectiveness of the central bank’s monetary policy.

Dr Bawumia also recommended financial inclusion,saying too many Ghanaians did not have bank accounts. He suggested a move from a cash-based economy to an electronic-based economy, economic transformation through job creation and introduction of a tax policy that would reduce taxes but increase collection.

He said resolving the current energy crisis was critical for economic growth, while agriculture held the key to economic growth.

Dr Bawumia warned that in 2016, the BoG would no longer be allowed to lend to the government as it had exceeded its threshold and appealed to the government to publish all the elements of the automatic price formula so it could be monitored by all.

Fiscal discipline needed

Dr Bawumia said the IMF bailout to Ghana could only work with fiscal discipline on the part of the government.

“The IMF programme does not guarantee fiscal discipline. A commitment by the government is what is needed to abide by zero financing from the Bank of Ghana,” he stated.

Writer’s email: edmund.asante@graphic.com.gh 

This story was first published by the Daily Graphic on March 26, 2015