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03.04.2006 Press Review

Editorial: Economy Is Booming But ...

By Statesman
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...People Are Moaning

IN the last week or so, from the Monetary Policy Committee of the central bank and the GIAC meetings, the world has had a clearer picture of the economic transformation that the country is undergoing currently.

What the figures show is that the economy of the country is substantially deepening, and the process must continue to be expertly steered and, to a large degree the route radically navigated. This is because what the beautiful figures do not disclose is that there is real and naked poverty in the land. And, people are struggling to make ends meet or simply resorting to dignity-sapping methods such as begging and pilferage.

There are largely two types of poverty in the world. One is self-induced by the lack of drive to succeed. The other is circumstance-inflicted. Our view is that, Ghana must persevere to attain a condition where the opportunity of circumstance-inflicted poverty would be at its barest minimal. A situation where self-induced poverty becomes so uncool and unpatriotic that it would progressively but with a crescendo be significantly reduced to the fringe minority as the spaces of participation widens.

The government's programme of investing in people, investing in jobs aptly sums up what the national agenda ought to be for the next decade at least, so that we can build up the skills of our able compatriots for a better future, while not de-prioritising the provision of jobs in the process of enhancing the quality of our human capital.

As mentioned earlier, already the figures are very encouraging. Non-oil merchandise imports for the first two months of this year is estimated at nearly $900 million. Most encouraging aspect of this figure is that 67.5 percent of that amount went into intermediate and capital goods, with only 24 percent on consumer goods. This is a country that is quietly but effectively producing more and more of what it consumes, thereby creating jobs in both the service and manufacturing sector.

Every sector of the economy saw an increase in credit, with bank credit up by 48.2 percent over the year. With the benchmark 91-day Treasury bill rate at an all-time low at 9.80 percent, the shift towards longer-dated securities has seen a sustained increase, a shift that opens up a national psychological gateway for long-term capital investment by Ghanaians for Ghana.

The miraculous rise of Databank (from $25,000 in 1990 to $50 million in 2006) is a befitting testament of what can be achieved here. It was dreamed in Ghana by Ghanaians; created in Ghana by Ghanaians; capitalised in Ghana by Ghanaians; built in Ghana by Ghanaians; managed in Ghana by Ghanaians; and growing within and beyond Ghana by Ghanaians.

In fact, just last year, out of the total $4.76 billion that was chanelled as remittances into the country through the financial institutions, 29.2 percent were from individuals. What it means is that Ghanaians abroad have the resources to contribute over $1.4 billion to the local economy yearly. The country has spoken about it but what has been done to crystalise this poverty-breaking liquidity?

The views of a member of government's investment advisory council, OT Prempeh, Chairman, M&J Group of Companies, gave the clearest indication about the need to stay focused and tailor β€œIn this meeting, I saw a lot of action from the ministers. However, what I would like to see next time from the ministers are deadlines in which we can clearly monitor what has been done and what still needs to be done and the resources needed to meet those deadlines.” The President was quick to remind GIAC members and the media that the first Ghana Business Leaders' Confidence Index undertaken by the Steadman Group in the last quarter of 2005 indicated that business confidence is high with the financial sector leading with 71 index points. 73 percent of corporate heads interviewed felt economic conditions were better than 6 months before; with 87 percent of those polled confident that conditions would get better in the next half year.

In Africa, Ghana has been ranked by a World Bank study (Doing Business in 2006), as the ninth easiest place to do business. In West Africa Ghana tops. If Ghanaians would face the truth, the days, months and years when the value of your unimproved wages dwindled on a weekly basis appear to be well over. Indeed, under President Kufuor, Ghana has achieved its longest sustained economic stability.

The economy may be booming, yet people are moaning and their cries are very genuine, too. The simple explanation is that: in a country where poverty is as rampant as mosquito breeding spots, the slowing down of rises in prices (inflation) however significant does not stop the poor from getting poorer. What it does is to slow down the pace of their growing impoverishment.

This means, analysts then have to seek out other indicators. Obvious of this is what is being done to widen the field of economic activity and enhance the ability and capacity of all, including those who get poorer traditionally and their children, to participate in that all-important field?

Typical triggers are FCUBE, Capitation Grant, targeted school feeding, introduction of the National Council for Technical and Vocational Education and Training and the continuous upgrading of schools and universities.

Poverty is far from being arrested in Ghana. To stretch the words of Dr Prempeh, we should be constantly monitoring these economic gains (and the above listed labour market tooling facilities) to gauge their real impact on the majority of the people.

Moan people shall, but are we pursuing policies with clear cut-off dates for some of these circumstance-inflicted moans?