Friday, 25 December 2015

Annus Horriblis: Ghana's Economy in 2015 & 2016

Thomas Sowell could not have said it any better … “It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong.” If this year the economy continually drifted from showing so much promise when Mills was in charge, then I cannot sincerely expect any better from our government - one which shows little commitment to administer any form of retribution to corrupt officials - in the coming year … an election year! I comment and predict those aspects of the economy which affected me the most. 

  •  Power & Fuel

Karpower’s 215.22MW addition to the national grid has stabilized the supply of electricity to my area for the past five days. I expect this to continue throughout the first quarter of 2016. Paying more for power is obvious now; mismanagement beckons, but the sight on elections will probably ensure that power supply is sustained. Why this government scrapped off subsidies on fuel when commodity prices were falling still baffles me (IMF can side-eye me all they want). It wouldn’t surprise me though if we see a sudden drop in fuel prices somewhere next year.

  •  Exchange rates

There were reports early this year that investors were not enthused about our bonds. Well, if anything at all, macroeconomic indices have worsened. When my best friend wanted to sell me some dollars somewhere in the third quarter of this year, our negotiations on rates turned out to be a full blown economic dialogue; I was firm about the depreciation of the Cedi by end of year even though we witnessed what seemed like a miraculous gain by the Cedi against the Dollar. I expect the Cedi to continually depreciate in 2016!

  • Inflation

“Inflation is taxation without legislation” we all know who said that, but taxation with or without legislation is still doom for us. The recently read Budget Statement forecasts some tax hikes, worse so in withholding taxes. I completely agree with Reagan … "we don't have a trillion-dollar debt because we haven't taxed enough; we have a trillion-dollar debt because we spend too much" and this coming year will probably witness an all-time high inflation in this country!

*drops mic*

[*thoughts* I'm no right-wing, not even low-key *pensive*]

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