Ghana needs specific microeconomic policies – Economists urge Government

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Some economists have proposed the introduction of specific microeconomic policies into the national budget to ensure their full implementation.

The policies should support small businesses, productive sectors, and the low-income earning workforce.

The economists said the move would help make macroeconomic gains reflect in the well-being of Ghanaians.

They made these remarks in relation to the 2024 budget, presented by Mr. Ken Ofori-Atta, Finance Minister, on Wednesday, November 15.

Ghana’s economy has recorded a growth rate averaging 3.2 percent in the first half of 2023 compared to 2.9 percent in the same period in 2022, which Mr. Ken Ofori-Atta described as a signal of “a strong rebound.”

This growth is expected to indirectly reflect in the microeconomy, but Dr. Daniel Amateye Anim-Prempeh, Chief Economist at Policy Initiative for Economic Development (PIED), holds a different view.

In an interview with the Ghana News Agency on Friday, November 17, he said that the country not having any specific policies directed at the vulnerable group would not make macroeconomic gains yield the expected benefits to Ghanaians.

“The assumption is that once the macroeconomy grows, it would create opportunities that will cushion Ghanaians, but without specific microeconomic policies, we won’t see the impact in the lives of Ghanaians,” he said.

“As a nation, we must have deliberate policies in the budget to support vulnerable groups in society, as the assumption of macroeconomic growth indirectly improving the living standards and income levels does not address the issue,” he noted.

The economist lauded the government for social interventions like the Livelihood Empowerment Against Poverty (LEAP), National Health Insurance Scheme (NHIS), and Free Senior High School (Free SHS).

He, however, explained that such interventions do not support the translation of improvements in macroeconomic growth into tangible benefits, particularly better living conditions for the productive force of Ghanaians.

“These policies are geared towards people who are economically unproductive, but the microeconomic specific policies will be focused on the economically productive group,” Dr. Anim-Prempeh.

He urged the government to create structures that would involve some of the energetic youth in vocational training and provide capital support to enable them to cater for themselves and their families.

Professor Yaw Nyarkoh, an economist, also explained that often, the government was preoccupied with macroeconomic numbers in the budget, which did not help in the development of the country.

Professor Yaw Nyarkoh, an Economist, also explained that often, government was pre-occupied with macroeconomic numbers with the budget, which did not help in the development of the country.

“Sometimes the numbers just fly by… what do they mean by 1.5 percent versus 1.7 percent growth?” the New York University professor of economics asked when he spoke at a forum, “Achimota Speaks,” in Accra on November 16.

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“If you are in the Ministry of Finance, it’s very important, but if you are looking for the development of Ghana, then we must go back to our microeconomics,” he said.

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