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05.03.2009 Business & Finance

Osafo-Marfo urges government to stabilize the currency to reduce inflation

By gna

Mr. Yaw Osafo-Marfo, a former Finance Minister in the New Patriotic Party (NPP) administration has said that the main challenge facing the government now is to fight inflation and the stabilization of the currency.

Mr. Osafo-Marfo said government must create more revenue and reduce government expenditure to be able to implement the 2009 Budget Statement presented to Parliament on Thursday.

He was reacting to the budget statement and how inflation can affect the private sector in an interview with the Ghana News Agency in Accra.

The former Finance Minister said the global recession has affected the economies of donor countries and this could affect developing countries, which depended on the West for assistance.

“We are no longer going to get the donor support as we used to and also the remittances from abroad will reduce significantly, therefore we need to cut our coat according our size.”

“We should develop our own revenue sources and also reduce the deficits by creating the necessary conditions for development.”

Mr. Osafo-Marfo said government needs to support the private sector financially to enable them to break through and become more viable.

He said stabilizing the currency would be good for the private sector since without that their profits would be eroded over time.

“Once the currency is fluctuating the private sector cannot thrive properly, since it is only when the currency is stable that the necessary condition for their development would be created.”

He said the government was doing what is obviously right for the private sector but the main problem facing it is the stability of the currency and inflation.