Thursday, 10 October 2013

Ghana's Economy in ED

... and did it get back on track? Ghana has been a stable democracy since 1992. In 2008, the late Prof. John Evans Atta Mills took over and as an economist, expectations for him to stabilize the macro economic indicators were high. He didn't disappoint. In the early months of 2012, Ghana's GDP stood around $74.9 billion, representing a 13.6% growth in 2011 and a 5-year compound annual growth of 8.0%. Inflation (CPI) continued to be in single digits, 8.7% with a public debt of 40.8% of GDP.



By the end of December 2012, Ghana's debts stood at $18,832.77 million, equivalent to 49.4% of Gross Domestic Product (GDP), up from $15,350.08 million. Inflation (CPI) also stands at 11.5%. The reality here in Ghana is that the executive always spends more than the budget parliament approves and it is about time the legislature brings government institutional heads who overspend what has been approved in the Appropriation Act to book.

Ghana borrowing to support budget deficits is as certain as darkness at night. Over expenditure and high debt to GDP ratios pushes the government to adopt stringent measures to raise revenue, like complete or partial withdrawal of public subsidies and increases in consumer taxes and public utility bills. This can only worsen the plight of the ordinary Ghanaian. 


Currently, there is only one way forward ... "prayer for a miracle!", because economic measures to turn things around seem not to be an option for the government. Meanwhile, the EIU maintains its economic forecasts that growth will remain below potential in 2013 and a large fiscal and current-account deficit. 



3 comments:

  1. It's sad what is happening in to Ghana. It's like it gets worse as time goes by

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  2. I like the twitter reactions Terry.

    Whoa.. I didn't realize the minimum wage was that low...

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  3. Classic case of eroding impressive economic gains in one political cycle. There need to be more regulation on spending in election years.

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