The new economic revival measures proposed by Finance Minister Ken Ofori-Atta are a welcome indication to international communities, according to a senior lecturer at the University of Ghana Business School (UGBS).
Dr Agyapomaa Gyeke-Dako, in an interview with JoyNews' Newsfile on Saturday, indicated that these actions will increase investor confidence in the country.
"If I look at some of the things they outlined, such as the 30 percent pay cut for government employees, the moratorium on imported vehicles, and the ban on travel restrictions that we have," she told Samson Lardy Anyenini, "in my mind, what that means is that they are trying to show the entire world that they are ready to consolidate and improve their fiscal position."
The economist's remark follows Finance Minister Ken Ofori-announcement Atta's on Thursday of a slew of proposals to save the country's economy.
At a news briefing in Accra, the Minister expressed confidence that the measures will go a long way to help citizens cope with the economic downturn.
These initiatives include spending reductions, a large-scale income mobilization effort, fuel price reductions, and currency financing.
While the steps are what a responsible leader would take to rescue the economy, Dr. Gyeke-Dako believes the administration should be congratulated for not implementing them throughout the years. She asked the administration, on the other side, to guarantee that the measures were properly implemented.
"If we claim we're cutting travel and other discretionary spending, we need to make sure we're making it transparent and obvious enough for Ghanaians to realize that we're doing it," she added.
Meanwhile, former Finance Minister Seth Terkper has warned that the government's new spending initiatives to help citizens are insufficiently meaningful and effective to alleviate the current economic crisis.
He claims that due to the country's strained internal markets, the government may have to continue borrowing to service existing obligations, which he believes will lead to an increase in inflation. "It's not a question of one or two measures; it's positive in one sense even if it's not meaningful because so much money isn't flowing there." By the way, we'll need to borrow to refinance [and] to repay the existing loan. That is the predicament in which we find ourselves.
"Is our domestic market that big, and if we're not allowed to go to the external markets, then I'm afraid the problems GUTA is raising will get worse because the government will go straight into the domestic markets to borrow, raising interest rates, and that's why the BoG is raising policy rates as a signal," he said.
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