An economist, Dr. Ishmael Yamson, has expressed doubt that Ghana’s economy will recover in 2025, contrary to the prediction made by the World Bank.
He believes that the government is ill-prepared to implement the necessary tough structural reforms recommended by the International Monetary Fund (IMF).
Dr. Yamson also pointed out that the government lacks financial discipline and readiness to rationalize its spending.
“Unless I see it happen, fine. But for now I don’t believe it will come to pass”, he doubted.
Speaking to the media on July 27, 2023, Dr. Yamson emphasized that Ghana will need significant time to fully recover from the current economic challenges facing the country.
He also mentioned that the projected recovery relies on external developments favoring the country and the successful implementation of potentially difficult programs by the government.
The World Bank’s report titled “Price Surge: Unraveling Inflation’s Toll on Poverty and Food Security” projected that Ghana’s economy would recover to its full potential by 2025.
The report suggested that economic growth may slow down in 2023 and 2024 but is expected to recover by 2025 due to fiscal consolidation fading and the effects of macroeconomic stabilization and structural reforms becoming evident.
However, Dr. Yamson disagreed with the notion that the current economic challenges can be solely attributed to the COVID-19 pandemic and the Russia/Ukraine war.
He argued that Ghana’s debt issues were present even before the Russia/Ukraine war began and criticized the government for not being prudent with its finances.
The economist emphasized that Ghana’s current economic challenge is more related to excessive expenditure rather than a revenue issue.
Over the years, the government has continued to spend even when the necessary resources were not available to finance these expenses.
Dr. Yamson warned that expenditure control is especially critical during election years to avoid undue pressure on the economy.
“We should not forget the projection also depends on external development’s favouring the country. In addition, government must also implement some programmes, which we all know may be difficult”, he said.
Additionally, data from the Bank of Ghana indicated that funds outside the operations of commercial banks in the country increased significantly, raising concerns among some banking sector players. Dr. Yamson advised the Bank of Ghana to address this situation promptly.
Furthermore, he expressed disappointment regarding former minister Cecilia Dapaah’s decision to hoard over a million dollars in her house, as it contradicted the government’s efforts to encourage savings in banks.
This behavior is seen as worrisome and counterproductive to the government’s goal of promoting financial responsibility among the public.
Overall, Dr. Yamson’s statements highlight the challenges faced by Ghana’s economy and underscore the need for sound financial management, structural reforms, and prudent fiscal practices to achieve sustainable growth and recovery.