I explained the Policy Rate and why you should care about this figure on the Monday and Thursday segment of “Entrepreneur In You”, at 8:00 PM on Joy Evening News and DStv Channel 421, and also on Joy 99.7FM on the Joy Business Report. It was a brief explanation.

Whether you are saving money to start a new business, running an existing business, or just living your life, this rate affects how much things cost. It influences how easy it is to spend or save money and impacts how the economy welcomes our entrepreneurial endeavours. You can watch the brief explanation here:

To dive deeper, I wrote a lengthy piece that extends our understanding of what affects the Policy Rate and what the Policy Rate affects. But then, I looked at the figures. I examined the current numbers. I considered the picture that I paint when I use our prevailing statistics and realised this informative article might be misconstrued as a journalistic ‘hit-piece’.

We’re at a charged and crucial time in Ghana’s history, politically and economically. Many factors feed into the present state of affairs, and the last thing I want is to get caught in the crossfire.

Yet, what must be said, must be said. Mrs. Margaret Thatcher, the former Prime Minister of the United Kingdom, once gave a speech on Friday, October 14th, 1983, at Winter Gardens, Blackpool. Excerpts of this speech convey what must be said, and I hope, through the words of the legendary Prime Minister, with the omission of parts of the speech that do not have a direct link to the purpose of this article. The excerpts are in chronological order.

Mrs. Margaret Thatcher, the former Prime Minister, once said:

…One of the great debates of our time is about how much of your money should be spent by the State and how much you should keep to spend on your family. Let us never forget this fundamental truth: the State has no source of money other than money which people earn themselves. If the State wishes to spend more it can do so only by borrowing your savings or by taxing you more [or by borrowing against current or future tax revenue that you will pay]. And it is no good thinking that someone else will pay – that “someone else” is you. There is no such thing as public money; there is only taxpayers' money.

Prosperity won’t come by inventing more and more lavish public expenditure programmes. You do not grow richer by ordering another cheque-book from the Bank. And no nation ever grew more prosperous by taxing its citizens beyond their capacity to pay. We have a duty to make sure that every penny piece we raise in taxation is spent wisely and well…

… Protecting the taxpayer's purse, protecting the public services – these are our two great tasks, and their demands have to be reconciled. How very pleasant it would be, how very popular to say, “spend more on this, expand more on that.” And of course we all have our favourite causes – I know I do. But someone has to add up the figures. Every business has to do it, every housewife has to do it, every Government should do it…

… But throughout history clever men, some of them economists, not all of them rascals, but few of them vicious men, have tried to show that the principles of prudent finance do not really apply to this Government, this budget, that institution. Not so! They always do, and every sensible person knows it, no one better than you, who had to deal with countries which flouted those principles and are now up to their eyes in debt. Who do they turn to? Those who follow prudent principles like us.

When you have only so much money to spend, you have to make choices, and the same is true of Governments. It’s sometimes suggested that Governments can opt out of these choices. They cannot…

… let me tell you how you really terminate the health service. You do it by pretending there are no hard choices. You do it by behaving as though Britain has a bottomless purse. You do it be promising what you cannot deliver, by assuming that all you need to do is to snap your fingers, cry “abracadabra” and lo and behold, the sky's the limit. But the sky is not the limit, for this or for any other Government, or indeed for any other country, and to imply that it is or ever can be is sheer humbug and a fraud on the people…

… In facing up to this problem of controlling public expenditure we in Britain are far from alone. Let me give you one or two examples of what is happening in other countries…

… I do not say that these measures are the ones we should follow but I do say that no Government, whatever its political complexion, can suspend the laws of arithmetic or run away from reality.

There is something else we share with other nations. The World recession has brought high unemployment to almost every country. And in such times, people understandably ask, “Where will the new industries and the new jobs come from?” Because there is always a temptation to believe that the dynamism of the past is finally exhausted and that the best we can hope for is to share out the work we have already got. Nothing could be more mistaken. That is not how our fathers and grandfathers transformed the standard of living in the Western world. They did not wait for the boost or scan the horizon for the upturn. They were the upturn and they provided the boost themselves.

If Britain had stayed as it was in 1900, millions of people in this country would still be working in agriculture and domestic service, and their standards of living would still be at 1900 levels. If people had known then, that by 1983, less than 3 per cent of the population would be in agriculture and only a tiny fraction in domestic service, they would surely have asked, “Where will the other millions find jobs?” Who could have foretold then that what people would want today and what they would buy today? Who could have foretold then what inventiveness would have produced decades hence? And while some machines that were invented replaced unskilled work, others created new goods undreamed of then: motor cars, kitchen equipment, new fabrics, films – and those created, the new machines created thousands of jobs.

But as new industries sprang into being the old ones declined, causing unhappiness and hardship. We did not then have the means or the organisation to temper the winds of change – the cash benefits, the retraining schemes, the redundancy benefits – that we have now…

… Who, 10 or 20 years ago, could have foretold that so many homes would have video recorders, which we are just beginning to produce here, music centres, home computers and pocket calculators? Who would have foreseen the revolution in office equipment and information technology? These may be called light industries but they produce tens of thousands of solid new jobs…

… We’ve got to remember something else. Our competitors are improving all the time, and some of them of course started well ahead of us. So we must improve even faster than they do if we are to catch up. It is no good just beating our own previous best; we’ve got to beat our competitors. That means that our Government must not put a heavier burden on our industry than other Governments place on theirs.

What does that mean? I will tell you. It means we must stick to the policies which get inflation and interest rates down, which keep business taxes down, and local rates down, policies that cut through the thicket of restrictions and policies that will reduce the time taken for planning permission. All of those. It is important that we continue each and every one.

For if Atlas has to carry the world on his shoulders, we need a good, strong Atlas and not too heavy a world. Our job in Government is to provide the right framework in which enterprise can flourish…

… The great surges of progress and prosperity in this country did not come directly from Government action. They were not based on national plans. They came from free men, working in a free society, where they could deploy their talents to their best advantage for themselves, for their countries and for the future…

… Visions do not become a reality overnight, or even in four years. They have to be worked for, consistently, unswervingly.