As the debate on the state of the economy rages, the Government's spokesman on Finance and Economic planning, Kwaku Kwarteng, has said the gloomy and erroneous picture of the financial system that some people paint is only informed by the comparison of the Gross Domestic Product (GDP) per capita at independence and now.
According to him, whatever that is, there is the need for Ghanaians to concern themselves with whether or not the nation's GDP per capita is on the upward or downward trend.
“Consistently, our GDP per capita has, in nominal terms, increased from $278 in the year 2000, through $287 in 2001, $324 in 2002, $391 in 2003, $442 in 2004 and $503 in 2005 to $550 in 2006. Even in real terms, this shows an upward trend and offer real hope for the future,” he told The Heritage.
“We need to appreciate our economic strengths before we can build on them. And the trend of our economic performance in recent years is definitely favourable,” he noted.
In an apparent reference to arguments by the CEO of Unique Trust Financial Services, Prince Kofi Amoabeng, who last Friday said that Ghana's economy is not getting any better, Mr. Kwarteng said it is always possible, with the benefit of hindsight, to look back on “our fifty years of nationhood and suggest that we could have done better as a people.”
He said: “That would be a legitimate observation. However, it is probably more useful to look at current trends of economic performance and to see whether the economy is on track.”
Mr. Kwarteng noted for instance, that if Ghanaians would recognise the private sector as an important player in the expansion of the economy and the creation of jobs, then the reduction of bank lending rates from an average of 47% by the close of 2000 to the current 24% level is healthy for the economy.
It makes it easier for businesses to borrow and play their roles in the nation's economic growth.
“Unsurprisingly, in the last six years, credit to the private sector, in real terms, has increased far beyond our GDP growth every year,” Mr Kwarteng said.
He further argued that the country's GDP growth rates have themselves increased consistently year after year since 2000, stressing that from a growth rate of 3.7% in 2000, the nation has improved on the pace of economic expansion every single year, recording a growth rate of 6.2% at the close of the last budget year.
Another area of argument by the government spokesperson is the improvement in the country's external reserve position of three weeks of import cover as of December 2000 to the current 16 weeks of import cover which engenders confidence in the economy and reduces pressure on our local currency.
This, he said, stabilizes the cedi against foreign currencies which in turn stabilizes the prices of many commodities. He said it is partly responsible for the reduction in inflation in recent years.
He said the suggestion that the education sector is collapsing is a complete myth. “No doubt problems exist. And of course, as in educational systems all over the world, there would always be problems. But a critical examination of developments within our education system holds hope rather than despair for the future,” he argued.
He asserted that the government has dared to expand enrolment at all levels explaining that between 2005 and 2006, enrolment at the basic level went up 16%, which is six times higher than the population growth.
This, he noted, comes against a backdrop of reforms of the curriculum contents.
“The challenge facing us is to find creative ways of improving conditions in our schools. Be that as it may, overall, the products we are churning out of our educational system compare favourably with their counterparts elsewhere,” he noted.
Mr Kwarteng conceded, however, that attitudes have to improve. He said Ghana would be in a much better shape than it is today if attitudes were better.
Credit: The Heritage