Former Finance Minister under the erstwhile Rawlings administration, Professor Kwesi Botchwey says although Ghana’s economy seems to be doing well, there is still room for improvement as it is yet to be stable.
Ghana’s sovereign credit rating has improved with Fitch ratings changing Ghana’s B rating outlook from “negative” to “stable” while S&P changed Ghana’s outlook from “stable” to “positive”.
The country’s debt to GDP ratio also declined for the first time since 2007, from 73% of GDP in 2016 to about 70% in 2017, with the rate of accumulation of Ghana’s debt stock also declining significantly.
Although Vice President, Dr. Mahamudu Bawumia earlier this year stated that the country’s economy increased from 3.7% in 2016 to an estimated 7.9% in 2017, an achievement he described as the best annual real GDP growth for the first year of any new government since 1992, the former Finance minister barely moved by the figures, suggested that there was more to be done and said while various indicators shows some growth the vulnerabilities in the nation’s economy still exist.
“I have seen some improvement in the macroeconomic indicators, inflation is lowering, growth has resumed and we must acknowledge that, but this is not the time to celebrate. It is no time for a flourish of trumpets because the vulnerabilities in our national economy still exists. If we do not expand our revenue base, we will not be able to sustain the growth and the small surplus that we realize for the first time in many years,” Prof Kwesi Botchwey said, during an address at the Second Revolutionary Lecture Series organized under the theme “Revolutionary economic trend, Ghana in focus: Past, present and the future”.
He urged government to implement policies that will benefit the country by expanding its revenue base instead of taking on projects that will dig deeper into the country’s coffers.
“We must be able to expand our revenue profile instead of adding on to our expenditure profile new social programs that are permanent and cost us even more money. We shouldn’t celebrate the smallest jump in GDP when we are climbing out of a deep trap. We must remember that the East Asia countries that are now blazing grew at an average of 8% GDP every year for a decade or more before they crossed the line,” Prof. Kwesi Botchwey noted.