Some experts have urged the government to continue to develop policies that will see positive growth figures reflect in the pockets of Ghanaians.
The International Monetary Fund (IMF) last Tuesday (11 October) cut its global growth forecast for 2023 amid colliding pressures from the war in Ukraine, high energy and food prices, inflation and sharply higher interest rates, warning that conditions could worsen significantly next year.
The Fund said its latest World Economic Outlook forecasts show that a third of the world economy will likely contract by next year, marking a sobering start to the first in-person IMF and World Bank annual meetings in three years.
“The three largest economies, the United States, China and the euro area will continue to stall,” IMF chief economist Pierre-Olivier Gourinchas said in a statement. “In short, the worst is yet to come, and for many people, 2023 will feel like a recession.”
The IMF said global GDP growth next year will slow to 2.7%, compared to a 2.9% forecast in July, as higher interest rates slow the U.S. economy, Europe struggles with spiking gas prices and China contends with continued COVID-19 lockdowns and a weakening property sector.
But in Ghana, the government is projecting a 3.2% growth rate for next year higher than what has been projected by the Bretton Woods institutions.
Speaking on the Asaase Breakfast Show on Wednesday (19 October), Dr Patrick Asuming, an economist at the University of Ghana Business School said, “The projections are that harder times are coming and that the worst is yet to come in this phase of the global economy. When you look at the downward revisions; the revisions for next year are even lower than what we have for this year … it doesn’t look that terrible.”
Assuming added, “I mean it doesn’t look that bad at all… I think it could have been worst. Based on what we have done so far; you could see why our government is still keeping the current projections as they are. It looks quite realistic … but what we shouldn’t do is let the growth figures hide the real difficulties that ordinary Ghanaians face. So we might be keeping up with our growth numbers it doesn’t mean that our living standards are keeping up.
Dr Daniel Amateye Anim-Prempeh, director of Research and Economic Analysis at the Busniess and Financial Times, said government policies should always reflect the realities on the ground, adding that “government policies shouldn’t be disjointed.”
He said, “I am a firm believer in the direct impact of the economy in the pockets of citizens … If you say that there is a growth in GDP then the question should be, are the people feeling it on the ground?”
“When we were having growth in our economy prior to the onset of COVID-19, that growth was not felt in the pockets of the people…
“When a government’s policy decisions do not benefit the people that it governs directly then clearly there is a gap somewhere,” he added.
Credit creation
Kwaku Adoboli, a financial systems analyst also said, “We need to find ways to do credit creation. We need to encourage the youth to start utilising the web and modern tech to start earning dollars into our economy because the reality is we have a dollarized economy.”
Adoboli added, “We are suffering from a strong cedi devaluation because we are servicing our dollar debts … And we need to start thinking of what we will do beyond the crisis which should inform policy decisions.”