Franklin Cudjoe believes Ghana’s economy is no stranger to the endless cycle of booms and busts.
It is a history of a relatively stable macroeconomic environment informed by sensible fiscal policy backed by sound monetary policy in between elections, and fiscal indiscipline combined with loose monetary policies around election periods.
This political business cycle is very costly economically, socially, and politically with fiscal consolidation measures requiring painful adjustments costs that are unevenly distributed.
Eventually, this reflects in higher inflation, higher public debt, and the associated debt servicing obligations resulting in creating uncertainties for the business and investment community.
There is considerable worry over the trajectory of the government’s current macroeconomic framework and its ability to attract and retain capital towards enabling a structural economic transformation as Ghana competes with the rest of the continent for critical capital.
Ghana’s domestic savings to GDP stood at 22.38 % in 2019 (15% average for SSA) whilst her investment needs exceed 30% of GDP (21% average for SSA) thus creating an external funding gap.
Exactly how this widening gap gets narrowed without undue reliance on expensive external borrowing is the government’s current dilemma.
To this end, IMANI Centre for Policy and Education and GIZ Ghana has sent out an invite to help Reform Dialogue Series (RDS) to examine the case for crafting a balanced and sound macroeconomic framework capable of enhancing growth and development through investment.
1. How do we make Ghana’s macroeconomic framework attractive to both foreign and domestic private capital?
2. How complementary have fiscal and monetary policies been to improving the investment climate in Ghana?
3. What challenges do the rising public debt pose to Ghana’s business and investment climate?
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