Economic watchers calls for quick economic recovery

Some Economic and Political Science watchers in the country have tasked the government to explore opportunities with the European Union (EU) to fast-track economic recovery and ensure ‘durable’ stability for Ghana.

The panelists at a forum held by the Institute of Statistical, Social and Economic Research (ISSER), noted that Ghana would experience a quick pace of recovery and make the economy resilient going into the future.

The forum discussed the legal implication of Ghana’s ongoing IMF programme as well as the role of the EU. The panelist discussed the possibility of Ghana unlocking more aid from the EU in addition to the financing support of $3 billion loan from the International Monetary Fund, IMF], technical assistance, policy guidance, and Foreign Direct Investment (FDI).

That, together with seeking financial, policy and economic governance support from other multilateral development partners, they said, would augment the implementation of the IMF loan-support programme.

In his submission, Professor Lord Mensah, an Economist said that “The $3bn that’s going to be spread for three years will be nothing to write home about, but there are addons that indirectly can help the economy to grow. We must, therefore, unlock the support from the development partners, including the EU, who have supported Ghana in past engagements with the IMF.”

The Associate Professor, Department of Finance, University of Ghana Business School (UBGS) moreover, said. “The agreement we have with the IMF is bilateral one, but there are indirect ways the EU and other development partners can influence. They can give us technical assistance, economic governance and financial support.”

Professor Lord Mensah urged the Government to align the current IMF programme with policy frameworks of the EU, indicating that the success of the programme would also be dependent on Ghana’s relationship with other development partners.

Prof William Baah-Boateng, the Head of the Economics Department, University of Ghana, also noted that going for support from the EU as well as other development partners would be critical to achieving the goals of the Ghana-IMF loan support programme.

Nonetheless, Prof Baah cautioned the Government against going for short-term loans to finance projects, which only yielded long-term dividends.

“Why should you go for short-term loans and commercial papers and invest them in projects that would take a longer time before we can generate returns?” Prof Baah- Boateng asked.

Prof Baah recommended that the Government provided the right investment environment and policy framework for Public-Private Partnerships (PPPs) and ensure that “the private sector comes in without the politician asking for a cut”.

Financial and Economic Powers

Prof Seidu Mahama Alidu, the Head of the Political Science Department of the University of Ghana also said the EU had “financial and economic powers” that the Government could explore to complement the IMF programme.

“The EU has a lot of investment in this country and there are more coming up that can support our economic stability, but Ghana must provide a stable economic environment for the EU and other development partners” he said.

There is a long-standing relationship between Ghana and the EU lasting more than 60 years, which has witnessed the implementation of some agreements.

For example, since 2016, Ghana has been implementing an Economic Partnership Agreement (EPA) with the EU – a trade and development pact under which Ghanaian exporters benefit from duty-free and quota- free access to the EU markets.

Under the same Economic Partnership Agreement, Ghana is to gradually open its market to around 80 per cent of EU products (from 2021 till 2029), while increasing the country’s competitiveness in the regional markets.

Ghana and the EU also have a Joint Programme (2021-2027), where an amount of €203 million will be provided for the period 2021-2024 for three priority areas – green growth and jobs, smart and sustainable cities, and good governance and security.

The EU accounts for 17.4 per cent of Ghana’s imports ahead of China, 16.8 per cent and the USA, 11.5 per cent of Ghana’s export.