Ghana’s economic fundamentals still fragile, warns Seth Terkper

Former Finance Minister, Seth Terkper, has expressed reservations about the country’s economic fundamentals, describing them as still fragile despite the presence of an International Monetary Fund (IMF)-supported program.

In an interview with Joy News, Mr Terkper cited a mixed performance marked by persistent challenges, including high inflation rates, an unstable exchange rate, and ongoing debt distress.

Mr Terkper acknowledged some gains but stressed the need for intensified efforts to firmly establish the economy on a sound footing.

Notably, he attributed recent improvements, particularly in inflation rates, to the Bank of Ghana’s shift away from financing the government budget. However, he cautioned that a complete economic recovery is yet to be realized.

“In the case of inflation, it was high because it crossed 50%, for the first time in many years (two or three decades) …such highs were reached because of the central bank deficit financing. The fact that the Central Bank has moved towards zero financing of the budget obviously will bring some discipline to fiscal, which was being financed, therefore should expect some definite improvement.

“Yes, it is a progress but we are not where we hope to be. All government’s aim is single-digit (inflation)”, he pointed out.

Efficient government spending emerged as a focal point in Mr Terkper’s analysis, as he emphasized its role in maintaining fiscal stability.

According to him, a stable fiscal economy is pivotal for creating an environment conducive to low-interest rates and robust private sector growth, both essential elements for a thriving economy.

Mr Terkper’s nuanced assessment offers insights into the intricacies of Ghana’s economic challenges and underscores the ongoing imperative for strategic fiscal management to foster sustained recovery and stability.

Source:norvanreports