The Director of Research at the Institute of Economic Affairs, Dr John Kwakye has expressed frustration that the Government does not heed the critical advice of independent economists, plunging the country’s economy into woes.
He said Ghanaian economists got frustrated when the government made economic decisions for political gains against their “prescribed” solutions over the years.
“We are economists. It is very frustrating. People call us from outside and ask us, is there no economist in Ghana and I tell them our own colleague, the Vice President is in there,” he said.
He was speaking as a member of a panel at a 3Business Colloquium on the topic, “The Road to the IMF”.
He called for the inclusion of independent-minded economists to the Government’s negotiation team with the IMF at every stage of negotiations, adding that, “the Finance Minister should be there because it will dent international confidence if you remove him at this time and that is not the best strategy.” Dr Kwakye said.
Professor John Asafu-Adjaye, Senior Fellow and Head of Research at the African Centre for Economic Transformation, disclosed that the outcome of a study by his outfit had shown that a one percentage point increase in GDP led to a 3 per cent decrease in inflation.
In that regard, he said it was necessary for the country to pursue an agenda of increasing production with mechanisms set to decrease the cost of production as well as improve enabling environment to attract domestic and foreign investment.
Mr Tsonam Akpeloo, Greater Accra Region of the Association of Ghana Industries (AGI), said it was problematic for policymakers to perceive inflation in the country to increase because of more money chasing fewer goods.
For an economy that imports about 70 per cent of its needs, he said an attempt to reduce the purchasing power of citizens through monetary policy was burdensome as it led to a rise in interest rates which translated into a higher cost of raw materials for local production.
He called for a bi-partisan approach to resolving the challenge of fixing weak exchange rate regime.
“They have increased the policy rate which meant that the interest rate had gone up. Already we are burdened,” he said.