“Mr. President, economy no enko yie” – Renowned economist calls for drastic structural changes

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Renowned Economist and Political Risk Consultant, Dr, Theo Acheampon has expressed his discontent over the current state of affairs of Ghana’s economy.

According to Dr. Acheampong, the country’s economy is currently in total tatters hence requires drastic measures in order to salvage the situation and put the economy on the path of recovery.

The economist made this observation in a Facebook post sighted by ABC News on Thursday, June 9, 2022.

Commenting on some of the reasons why the economy is in its current state, Dr. Acheampong admitted that global supply-chain shocks have had impacts on economies across the globle, however, he was quick to add that Ghana’s current economic predicament cannot to be entirely attributed to the global happenings.

In his view, the economist believes the major cause of the economic downturn in the country is what he describes as deeper policy incoherence between the monetary and fiscal areas of the economy.

There is a disconnect between the country’s interest rate setting regime managed by the Bank of Ghana and the fiscal policy managers.

“Mr President, the economy no enko yie. It is true that global supply shocks are being felt everywhere, including in Africa, but Ghana’s case cannot be fully explained by this. There are deeper structural factors. I see lots of policy incoherence on both the fiscal and monetary front,” Dr. Theo Acheampong wrote. 

Among other suggestions, he called on the Bank of Ghana to be more proactive in setting interest rates.

“Need the Bank of Ghana to be more proactive especially on setting interest rates which are not mostly just based on ex-post (one month lag) inflation targeting but using more nowcasting (AI + machine learning approaches + PMI’s) to better gauge consumer and business sentiments,” he added.

On the fiscal policy side, he called on government to consider a temporary tax on the profit margins of commercial banks given the improved profitability of the sector.

He again urged government to show real commitment by cutting down the enormous waste in the system in addition to a review of the controversial Electronic Transfer Levy (E-levy).

The economist further stated that the government must “show real commitment to cutting down waste (e.g. no need to put any more money into the national cathedral project; try new business models for some SOEs); urgently pass the tax exemptions Bill; reduce the e-levy rate to below 1% and increase daily limit to GHS 300 before the tax kicks in.”

“And please, fire some of your incompetent appointees. Time is nigh for a major cabinet reshuffle. Living standards are deteriorating. The system make hot waaaa,” he concluded.

 

 

SourceABC News

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