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Duffuor on prospects for a stable economy…Says Macro stability is prime

By Daniel Nonor - Ghanaian Chronicle

Drawing so much confidence from his experience and his enviable record as a one time Governor of the Bank of Ghana, The Minister of Finance-designate, Dr. Kwabena Duffuor has reiterated his commitment to bring his expertise to bear in transforming the economic fortunes of the country.

Defending his nomination at the Appointments Committee yesterday, Mr. Dufour stated that although the country is facing temporal difficult challenges in term of its budget deficit, his prime concern would be to achieve macro stability within the first two years of his administration and to clear all outstanding deficits within the next two years, in order to set the tone for an agenda for a strong economic fortunes of the country.

“We have programs to provide jobs and to set up small scale industries, but the first priority is to achieve stability. If we achieve stability in this first year and bring the deficit down to between 8 to 9 percent, then by next year we will be able to achieve about 4 to 5 percent,” he said.

Mr. Duffuor restated his perception about the state of the Ghanaian economy, and restated his description of the Ghanaian economy as challenged.

On issues concerning the incessant devaluation of the cedi against major currencies such as the dollar, and a perception that he (Mr. Duffuor) believed and supervised a free fall of the cedi when he was governor, he responded by saying “I don't believe in the free fall of the currency,” adding that as a governor he “never supervised a free fall of the cedi”.

He reiterated that in the first two years under his watch as a Governor, the country earned great respect the world over and the currency had stabilized by 1999, and inflation dipped to 9.4 per cent by May, that year.

He however added that the economy was hit by severe terms of trade, as cocoa and gold prices dropped significantly, whiles the dollar inflows had also dried up. “Ghana in those years was in serious crises, and there was so much pressure on the cedi because foreign exchange (dollar) was coming into the country.”

He further explained that in spite of all these challenges at the time, they ended that year with 13.8 per cent inflation.

Asked if the current economic outlook could support the elaborate developmental programmes that the government intends to embark upon, some of which include the rehabilitating of existing irrigation dams, building of hospitals and other social programmes, he said his priority will first and foremost be the achievement of stable macro economy, before considering any of such social agenda.

He said improvement in tax mobilization regimes would receive major boost with the computerization and atomization of the revenue agencies to minimize revenue collection in the country.