In recent times, the economy of Ghana is going through turbulent times. The economy of Ghana like all other economies around the World is going through stiff and tougher times. However, this is basically due to the COVID-19 Pandemic which came to hit hard countries all over the World which Ghana was not spared. As a results of the influx of the deadly Covid-19 Pandemic, Ghana’s economy has been going through tough economic-meltdowns. In fact, the economy of Ghana, in its current form is nosedive. This has brought an untold hardship on the government of Ghana. In all fairness and sincerity, it must be noted that, the deadly pandemic withheld almost all the sectors of the Ghanaian economy ranging from the Agriculture, Service, Trade and Industry, Tourism, Transport among other things. To add salt to our injury, the Russia’s invasion of Ukraine has also had devasting effects on the global economy which Ghana is not exempted.
Causes of Ghana’s Economic Crisis
Based on empirical records, the Ghanaian economy was experiencing a rapid growth of 7% between 2017 and 2019. This is according to the World Bank’s assessment and report on the economy of Ghana. However, the down movement of the economy of Ghana can be attributed to myriad factors which includes the following:
Covid-19 Pandemic
The emergence of the Corona Virus Disease (Famously known as Covid-19) in December 2019 is believed to have come from Wuhan, China. This deadly virus was declared a pandemic by the World Health Organization (WHO). However, the ravages of it have been felt by all countries (economies) around the globe which Ghana is inclusive. Objectively analysing the effects of Covid-19 Pandemic on the economy of Ghana, it could be said that, this deadly disease has impacted negatively on the prospects of the Ghanaian economy. According to the World Bank assessment and report on the economy of Ghana, a 7% rapid economic growth was experienced by Ghana’s economy 2017-2019. Apparently, this depicts that, before the advent of the deadly Covid-19 Pandemic, Ghana, classified as Low-Income Developing Country (LIDC) was massively doing well in terms of prudent economic management.
Russia-Ukraine War
The war that is between Russia and Ukraine is one of the chief reasons why Ghana’s economy is in tatters. It must be put on record that, the invasion of Russia in Ukraine on the 24th February, 2022 has had excrutiating effects on the global economy which, once again, Ghana is a parttaker of these effects. In fact, to buttress this point, on the 26th May, 2022, the head of the World Bank, Mr. David Malpass warned that Russia invasion of Ukraine could cause a global recession as the price of food, energy and fertilizer jump. He told US business event that it is difficult to “see how we avoid a recession.” Nonetheless, it is crystal clear that, the prices of goods and services keep skyrocleting each passing day. Prices of commodities such as fuel, utilities, food, transport fares among others have outrageously increased. Obviously, this artificial phenomenon has made cost of living for the ordinary Ghanaian extremely difficult and unbearable.
High Alleged Corruptions Among Government Officials
Annually, Reports are being issued by the Auditor General’s office indicting some top officials of government and the politicians syphoning and embezzling public funds left, right, centre. However, it is so saddening and sickening to note that, those government officials, politicians, public servants and so on and so forth cited or indicted in this Auditor General’s Report are mostly left off the hook to the detriment of the country. In fact, the quantum of money allegedly embezzled, misappropriated and misapplied by those indicted individuals could be used to embark on massive government projects to better the living conditions of the ordinary Ghanaian. You see, the million-dollar question worth asking is, how could a corruption-ridden country like Ghana prosper?
Too Much Freebies
Apparently, since the inception of the Akufo-Addo’s government on the 7th January, 2017, Ghanaians have been made to enjoy too much freebies introduced by his government. In fact, some of these “unnecessary” freebies include free water, free meals supplied to a section of the Ghanaian populace during the apex level of the Covid-19 Pandemic, free uniforms for the basic school pupils and the students of the second cycle institutions (SHS), free examination fees among other things. The statistics from the Ministry of Finance and Bank of Ghana give credence to the fact that these freebies together with the FSHS and Teachers and Nursing Training Allowances are weighing down the government, hence, these form a chunk percentage point on the government’s wage bill.
Effects of Ghana’s Economic Crisis
High Debt Levels Weighing down the government
Imperatively, it needs to be pointed out that, the mountainous and escalating debt levels of the government are tied to the fact that, the government has. This means that the difference between the government’s revenues (funds) and expenditures is considerably huge. However, it would be more factually correct to say that, the government is always hungry and hurry to borrow from both internal and external to be able to deliver its responsibilities to the citizenry.
Rampant Labour Agitations (Strikes)
As an of the economic turbulence faced by the Ghanaian economy, there have been rampant labor agitation, strikes, and demonstrations inter alia by the Trade Unions and the Civil Society Organizations in the country. Recently, the Teacher Unions in the country embarked on a nationwide strike demanding a 20℅ Cost of Living Allowance (COLA) from the government. However, it could be agreed by everyone that strikes by Labour Unions in our country have dire consequences on the economy.
Soaring Cost of Living
The ordinary Ghanaian living in Ghana today is faced with a soaring cost of living whereby he or she finds it difficult to feed himself or herself a square meal daily not to talk of being able to pay for his or her rent and accompanying utility bills. However, this has in effect, created a room for high inflationary rate whereby more money chases fewer goods and services in the country.
Suggested Solutions to the Ghana’s Economic Crisis
Resorting to the IMF for Financial Bailout
As the popular maxim has it, serious situations call for serious solutions. In light of this maxim, the president of Ghana, H.E Nana Addo Dankwa Akufo-Addo has instructed his minister responsible for finance, Hon. Ken. Ofori Atta to begin a formal talks with the International Monetary Fund-IMF whose representatives are already here in Ghana discussing how an alleged bailout of $3 billion could be advanced to Ghana to help stabilize the economy in the short term. From the perspective of historical antecedents, the IMF bailout facility is not a “free lunch” in fact, it comes with its own conditionalities and restrictions on the government. However, the grapevine source of information has it that, government risks cancelling its pro-poor policies such as the much touted Free Senior High School, One District One Factory, Planting for Food and Jobs, Teachers and Nurses Training Allowances among others. Personally, my conviction tells me that, these finest policies and programmes of the government could be spared at the end of the negotiations. This is because these policies have the potency of strengthening the industrialization drive of the county, alleviating the plights of the poor Ghanaian.
Cutting Cost and Wastage
It has been blamed on HE Nana Addo Dankwa Akufo-Addo of having an elephant-sized government since the inception of his government beginning 7th January, 2017 till now. Financially, the large-sized government of Nana Akufo-Addo has some financial burdens on the economy. However, this puts more pressure on him to always meet the expenditures that go with managing this myriad number of ministers and other officials. It will be more prudent to down-size the government of Nana Addo in these two years left in his administration. In effect, this will cut “unnecessary” cost and avoid wastage in his government.
Fighting Corruption and Punishing Culprits
Many a Ghanaian were of a firm belief that, when Nana Akufo-Addo came to power as President of Ghana, corruption would be made unattractive to Government Officials, Public Servants and so on. However, on the contrary, corruption has permeated almost every fibre or sector of the economy with some government officials been charged with corruptions charges and are standing trials in the law courts. Fiercely, the pervasive corrupt practices in the government of Nana Akufo Addo should be fought by and with all legislations and the law enforcement agencies in the country. Importantly, the Special Prosecutor, Lawyer Kissi Agyabeng should be on his toes and step up to the plate in judiciously prosecuting alleged corrupt officials of both the past and present governments. When this is done, it will serve as deterrent to others and that, they will never develop the taste and appetite for corruption in this country.
Conclusively, I would like to conclude this harmless article of mine by reiterating the fact that, the future is never lost on Ghana for going to the IMF for Bailout. However, what this idea of going to the IMF means is to seek for financial Bailout to help Ghana be on sound economic and financial footing. In fact, it can be recollected by all Ghanaians that, the economy of Ghana has been in disarray fundamentally due to the emergence of the Covid-19 Pandemic and the Russia-Ukraine War which appears not ending anytime soon.
In fact, we all should tighten our belts as said by the President of the land and fight this economic quagmire together. It must also be noted that, Ghana shall come out of this IMF conditionalities bondage successfully whereby our economy would have been put to a proper shape and form with a more stronger and firmer economic footing ready to take off to the next level. This too shall pass as famously quoted by the President of the land, HE Nana Addo Dankwa Akufo-Addo.
By Justice Reuben Adusei