Current economic progress transient; fix the fundamental weaknesses – Economist to govt

An economist and financial analyst at the University of Ghana, Dr. Patrick Asuming, has urged the government to, as a matter of urgency, focus on building the economy more sustainably and not be fascinated by transient positive indicators.

This follows the Finance Minister, Ken Ofori-Atta’s attribution of the consistent decline in inflation to the government’s dedicated efforts in restoring macroeconomic stability.

Inflation has dropped for the fourth consecutive time, with November recording a rate of 26.4 percent.

During a dividend presentation of 30.89 million cedis to the government by the Board of Twifo Oil Palm Plantation Limited, Mr. Ofori-Atta emphasized the tangible impact of these endeavours on the economic landscape.

Dr. Asuming, in an interview on Eyewitness News on Citi FM, stressed the need for the government to focus on improving the fundamentals of the country needed to make the economy more sustainable.

He opined that it was also pivotal for the country to invest in domestic production and address other infrastructural problems to reduce overdependence on foreign produce drastically.

“We have to build the economy more sustainably so that when we see these positive indicators, we can be firmly assured that we are going to see longer-term progress. There are fundamental weaknesses coming from the structural problems of producing goods and services. Last month there was this conversation about trying to restrict import. The economy is still dependent on imported goods and services and foreign financing. What we should know is that those are always going to give us problems, and we have to invest more in improving domestic production.”

“There are infrastructural weaknesses in the economy, and if we start breaking down our budget, we see that next year we are not going to spend much fixing our infrastructural issues that will bring us sustainable long-term growth. And even though our currency is doing well now, we know it is because it is something artificial that is sustaining the currency. It is not coming from a fundamental change in how we finance the economy that will reduce our susceptibility to long-term shocks in the international market. So we have to address those,” Dr. Asuming said.

The economist admitted that though the country had seen some growth compared with that of last year, some of these indicators could be transient.

Dr. Asuming added that the country needed to add more value to its produce and strategize on gaining more inwardly.

“Right now, because we are seeing some positive elements, these are transient in the main. The fundamental things where we begin to see the Ghanaian economy producing, adding value and then doing more inward-looking and reducing our overdependence on foreign financing, we are not applying them.”

“So yes, what we are doing is very good. But if we continue on this path, it will be a matter of time before the difficulties return,” he stated.