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Ghana must address challenges to sustain macroeconomic growth

By Belinda Ayamgha, GNA

Accra, Aug. 7, GNA – Mr Ridle Markus,
the Strategist for Research at Barclays Africa, says in order for Ghana to
achieve a strong and sustainable macroeconomic environment, it is important
that she addresses the short and long-term challenges facing the economy.

Speaking on the topic: “Maintaining a
Stable Macro Economy” on the first day of the Ghana Economic Forum in Accra, Mr
Markus noted that certain policy issues and challenges had to be addressed in
order to sustain the gains made in the macroeconomic environment.

He said investors and rating agencies
were concerned about the debt levels, large fiscal and external imbalances,
weaker banking sector and fiscal slippages.

In the short term, Ghana, he said,
would need to ensure prudent public spending to end slippages, ensure price
stability, reduce debt and interest rates and address electricity constraints
among other things.

In the long term, he said the high
unemployment rate, particularly among the youth, high levels of poverty, and
the volatile growth patterns must be addressed as well as bring the informal
sector into the formal economy.

“To do this, there is the need for
political commitment and willingness to address these challenges and achieve
the targets sets out in Ghana’s growth agenda,” he noted, adding that Ghana
also needed quality data to help make decisions to inform investors.

Mr Markus said key pillars including
good governance, macroeconomic stability with a flexible currency, good fiscal
and monetary policies and strong financial institutions and policy coherence
were necessary to create a supportive environment for the private sector to
freely operate.

This, he said, would give government
the space to invest more money and efforts into providing social infrastructure
such as education, health and water and sanitation.

Mr Markus said this would also ensure
inclusive growth where all sectors of the society would have the same
opportunities and equitable income distribution and ensure employment creation.

He noted that while Ghana was seeing
improvements in its economic performance with growth on a steady increase, the
growth was still mainly driven by the resources.

“Ghana’s economy is becoming
increasingly linked to the performance of the commodity cycle,” he said, adding
that growth was usually recorded when there was an uptick in the commodities
market, which generated opportunities and risks, depending on how it was
managed.

Mr Samuel Ackhurst, the Chief
Economist at the Ministry of Finance, said government recognised the need for
macroeconomic stability and was focused on four main thematic areas that would
ensure sustained growth.

These, he said, included revenue and
capping of earmarked expenditure policies, debt management and price stability
for growth.

Mr Ackhurst said those policies had,
so far, been encouraging with inflation under control at 12.1 per cent and the
Producer Price Index also reducing as at end of June, 2017.

The external sector was also showing
positive results, with the trade balance showing a surplus of about $1.4
billion, after years being in a deficit.

Mr Ackhurst expressed confidence that
the macroeconomic growth achieved would be sustained.

The two-day forum, the sixth in
series, is on the theme: “Building a Ghanaian Owned Economy, 60 Years after
Independence.”

It was organised by the Business and
Financial Times in partnership with the Ghana News Agency and GCB Bank among
others with Barclays Bank as the lead sponsor.

GNA

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