Panellists at a discussion on the global economic crisis have stressed the need for a paradigm shift in the structure of the Ghanaian economy for the country to withstand and reap opportunities from the international macro economic challenges created by the downturn in developed economies.
They said Ghana would not be a mere spectator of the crisis, as evidence adduced from recent economic analysis suggested that the effects of the downturn was already manifesting itself in Ghana, with the drivers of the economy being adversely affected.
Thus, they held that the current macro-economic and social challenges posed by the crisis required a much better understanding of policy responses, recommending that government put together a team to critically assess and fashion out indigenous policy imperatives that were “bold and broad-based” to enable the country escape recession and benefit from the downturn.
The panellists were speaking in Accra at the maiden edition of the Institute for Democratic Governance's (IDEG) Policy Dialogue aimed at addressing current and critical national issues.
It was on the topic: “The Global Economic Crisis: Challenges and Opportunities for Ghana”.
Dr Robert Osei, Research Fellow of the Institute of Statistical Social and Economic Research (ISSER) said Ghana was considered highly exposed to the global crisis, as government revenue was likely to be affected through the fall in demand for exports, and reduced grants and loans.
Already, exports declined considerably in the second half of 2008, indicating implications for diversification of traditional exports. Remittances from abroad also declined over the same period.
He said as a result of the downturn, the wavering local investor confidence was likely to be reflected in a worsening situation on the stock markets, with financial intermediaries being more risk averse, leading to cuts in their lending which would affect the growth of Small and medium enterprises.
However, Dr Osei said that even though the picture looked gloomy for the country and other developing nations, the crisis provided an increased opportunity in respect of policy space, vis-à-vis what international financial institutions want Ghana to do.
He said the crunch would also compel the country to think more creatively in opportunities for investment, thus government would look more at what the nation could do for itself, instead of relying on donor assistance, which, from all indications would reduce in the coming years.
The situation would also force the country to rethink inwardly, as to the private sector leading growth, especially in the manufacturing sphere, and how and on what to spend resources on, and hopefully trigger a change in formulation and implementation of policy.
He also recommended that the issue of regional integration should be revitalised for developing countries to utilise opportunities that existed in their economic blocs rather than look to the west, where economic agreements were not favourable to their growth.
Mr Kwame Pianim, an economist, said the global crisis called for bold initiates by government to strengthen the economy.
He said even though the downturn posed serious challenges for Ghana; it was a chance for the country to rethink on economic and social policies, particularly the improvement of agriculture.
Mr Pianim noted that the situation called for the need to understand the social outcomes and the provision of appropriate social interventions to mitigate them.
He called for a reduction in public expenditure, the removal of certain subsidies, and accelerated regional cooperation to contain the global downturn.