Ghana is at a crossroads and the need to institute important corrective measures cannot be overstated.

There is no shortage of solutions to our problems. It is the indolence and avid affinity of this government for a cosmetic approach to governance that has brought us here. Thus, we need far-reaching actions from the President and his Economic Management Team to resolve our challenges.

Despite the challenges I remain confident that despite the current gloom, we can turn things around and create a brighter future for ourselves. Ghana’s best days are still ahead.

  1. Those directly responsible for the economic crisis must bear responsibility and it is inconceivable that the Minister of Finance remains at post, having presided over the worst economic meltdown in Ghana’s recent history. The President must, without further delay, relieve the finance minister of his position and appoint someone who is focused on national rather than self-interest and who has the requisite skill, experience, and knowledge of public financial management in his stead. The personal benefit that the current minister and his cronies derives from borrowing on our behalf through the commissions taken by his companies who serve as transaction advisers raises an unacceptable conflict of interest situation which must end immediately.
  2. It goes without saying that the Economic Management Team, has failed and must be reconstituted immediately, with fresh ideas and perspectives. Having supervised the worst public debt buildup, the worst budget deficit, the worst debt to GDP ratio, the worst credit ratings and downgrades, the worst performing currency in the world, the worst crisis of confidence in our economy, the highest fuel prices ever, ever-rising inflation and unprecedented hardships, the current Head of the Economic Management Team (EMT) has clearly fallen from his ivory tower as a self-styled economic messiah to a poster boy for economic mismanagement and his leadership of the EMT is no longer tenable.

He has lost sight of cause and effects relationships in the economic value chain and complains that our dire economic state is due to bad ratings from international agencies, rather than the fact that our dissipating economy resulted in those bad ratings. How does that assure Ghanaians he is focused on the critical things that need addressing?

The EMT has been bedeviled by their own ineptness, over exuberance and excessive focus on linear thinking of a theoretical cause and effect relationship, devoid of the practical influences of complex real-life nuances.

In short, the EMT assumed a laboratory experimental approach, typically found in textbooks, to the extremely complex Ghanaian economy, and analysed the impact of one variable at a time.

I have often said to people, in most cases, when you are analysing the Ghanaian economy and an obvious simple solution comes to mind, THINK, THINK AND THINK again. The consequence of this lack of depth and experience complicated the problems of economic management with excessive, yet costly experimentations that did not yield viable results.

Alternatively, the President may want to consider appointing one of the many highly qualified Ghanaian public finance management experts to lead the EMT.

  1. The President must as a matter of urgency reshuffle his cabinet. More than 5 years of an administration without a major cabinet reshuffle has calcified the management of the Ministries, departments and agencies. These MDAs and SOEs have become fiefdoms in which untouchable Ministers and heads of agencies are now monarchs of all they survey. Yet they lack the energy, passion, and ideas to turn moribund situations within the MDAs around. Fresh ideas are needed. Morale is at a low in these MDAs.
  2. The seriousness of the economic meltdown must compel government to unveil a clear and workable cause of action, emanating from broad based thinking and consultation, rather than its current state of denial and wrong causal attributions. Such broad consultation must lead to a Post-COVID Economic Recovery Plan. A programme that will focus our energies on building an economy whose fruits of growth will benefit all Ghanaians and give everyone a fair chance at success. The participants of this broad-based consultation must reflect the demographic, social and economic status mix of the country.
  3. There must be a clear and measurable reduction in government expenditure. Even though this is not an easy cause of action, it is a necessary one, nonetheless. I will be the first to admit after running the economy on zero percent, 0%, Central bank financing in 2016. However, a crisis such as this requires drastic measures. I am of the view that, an open and transparent discussion of the true situation with the citizenry will help achieve this objective. The President must lead the way in the demonstration of prudence and modesty in the use of public resources.

He must put an end to the ostentation and opulence and show sensitivity and respect for Ghanaians by using the Presidential jet acquired with taxpayers’ money and stop the rental of expensive jets. Only then would he have led by the power of his example, to quote Bill Clinton, to enable Ghanaians make meaning of the sacrifices he is making to get us out of the doldrums. The extravagance must give way to frugal application of public resources. We cannot live beyond our means and expect not to fall into debt and financial ruin.

  1. Related to this, government must drastically cut and trim down its size, rationalise and bring to reasonable levels, the pay packages of CEOs of SOEs, other senior public servants and heads of state organisations. The time has come to look at the practice of providing free utilities and the allowances such as inconvenience allowance, entertainment allowance and other such innovative allowances that are crafted just as income enhancers.

The practice of setting up amorphous and poorly structured public agencies to run one-off, ad hoc policies must also stop and those already created must be merged with more established and time-tested agencies already carrying out similar functions to curtail the needless duplication and waste. There must be a real effort to plug the loopholes that facilitate the unconscionable losses of public funds incurred through financial malpractices as revealed by the Auditor-General and the losses incurred by SOEs. Strict compliance with public financial management rules and laws must be enforced.

  1. Government must limit borrowing significantly. If we all agree we are in an economic abyss, submerged under the suffocating weight of unsustainably high levels of debt and are at risk of default, then the wise thing to do is to limit borrowing. Government must as a matter of urgency issue a moratorium on all non-concessional borrowing to avoid an increase in our public debt. After the issuance of this moratorium, the dithering must stop, and very urgent steps must be taken to confront the debt problem. The stark reality is that in our current situation, it is just not possible to be servicing our debt at the present levels and have any significant resources left to meet critical expenditure obligations.

It is obvious that this government has no plan on how to handle the debt crisis. I note that Government refused to take advantage of the Debt Service Suspension Initiative (DSSI) and the Common Platform for Debt Treatments beyond the DSSI, because of the peculiar nature of Ghana’s debt profile where only about 20% is from multilateral and bilateral partners. The bulk of our debt is from the international credit market and other commercial borrowers with default triggers related to bilateral and multilateral reprieves. Government must open a discussion with the multilateral finance partners and our creditors on a debt restructuring programme which will ease our debt burden and create some fiscal space to allow expenditure in critical sectors of the economy that are currently starved of funds.

Rationalizing and enforcing strict compliance of our tax laws in areas such as the extractive sector, including a pragmatic legislation of the tax exemptions regime can help improve resources inflow. For example, a simple insistence that mining companies relay their export revenues into Ghana, as per the relevant laws, rather than keeping such funds offshore, as is the current case, can help exchange rate stability. We must achieve a national consensus on these alternatives and take proactive steps as soon as possible. The longer we tarry, the worse the situation will get.

  1. While implementing these measures, government must adequately signal to the international finance providers a clear effort at meeting future obligations. Government must commit to using some of the windfalls that we earned from the rising crude oil prices to revitalise the sinking fund in anticipation of future debt servicing. We estimate that the hikes in crude oil prices will translate into a GH¢3 billion or about US$550 million windfall for government this year. Part of this money must go into the sinking fund to build buffers for repayment of the 2025 maturing Eurobond.
  2. Government must also take immediate steps to restore credibility to the management of the economy. A contributing factor to the plummeting of investor confidence in our economy is the practice of underreporting and concealment of key economic indices like the budget deficit, public debt, and Net International Reserves. For instance, the Bank of Ghana must stop adding proceeds of the Heritage Fund and other encumbered funds like Eurobond proceeds to our Net International Reserves to create a false sense that we have more buffers than we actually do.

National data and economic indices should be a matter of fact and not subjected to needless debate and contest. We cannot be debating the factual levels of debt, reserves, inflation, kilometres of roads constructed, number of schools and hospitals built, and whether CAPEX investments should include KVIPs, metric tonnages produced of food items. Ministers must not be contesting reports and data furnished to the public from their own outfits and should not be comparing indices generated from rebased figures to figures prior to the rebasing. In effect government data must be transparent and give a true picture at all times of our national situation.

  1. In addition, government must clarify reports which are rife in the investment community that it intends to use the Heritage Fund as collateral to raise a $ 2 billion loan from a consortium of banks. We wish to serve notice that if this turns out to be true, we in then NDC will oppose it vigorously in the same was that we oppose the Agyapa deal. We cannot support the collateralization of every single source of future revenue just to finance today’s consumption. This practice will deny future governments and future generations the opportunity to benefit from revenue streams accruing from the funds which were originally intended to finance critical sectors of the economy. The Heritage Fund was set up purposely for the benefit of future generations who we cannot saddle with debt and no heritage.

To make certain that this practice doesn’t become the order of day, I would propose the enactment of legislation to stop the collateralization of statutory funds because those funds are now being abused and their original purpose are being seriously hindered.

  1. It is obvious that the assumptions underlying the projections in the 2022 budget especially regarding revenue are overambitious and are unlikely to be achieved considering all that has transpired since the presentation of the budget. Government must revert to more realistic targets and avoid creating further doubts in the minds of investors.
  2. Let me add that it is time to change the structure of our economy by allowing Ghanaians to achieve the popular General Acheampong mantra of “capturing the commanding heights of our economy.” We must increase the GNP of our country as a share of our GDP. Otherwise impressive GDP numbers are mostly the share of foreign investors and subject to repatriation at will.
  3. We must leverage our comparative advantage in agriculture by investing in agribusiness to complete the agriculture value chain in respect of marketing and processing of our agricultural products.

These are some of the interventions government must adopt in earnest. This is not the time for political posturing and display of empty pride. We are staring down the cliff of economic collapse and everyday wasted winds down the clock further.

Action needs to be taken now!