Minister for Finance Dr. Ato Forson has been urged to consider redirecting resources into high-impact sectors such as agriculture, renewable energy, and technology among others.
This is aimed at ensuring that the country generates more from such sectors of the economy and thereby reduce inflation
The advice from an HR Practitioner at the Food Expert Ltd, a Freezones firm in Ghana is captured in an open letter to the Minister for Finance, Dr. Ato Forson.
“Redirect resources into high-impact sectors such as agriculture, renewable energy, and technology. For instance, Ghana’s Savannah Accelerated Development Authority (SADA) regions could be revamped to become hubs for solar farms, tapping into global renewable energy investments,” it stated.
Below is the Open Letter to the Minister for Finance.
Dear Hon. Cassiel Ato Forson,
Congratulations on your appointment as the Finance Minister of Ghana during these critical times.
Your new role comes with immense challenges and expectations, as Ghanaians look to
you to stabilize and transform our nation’s economy. This open letter seeks to highlight some key areas requiring your urgent attention, notably the Debt Exchange Program, haircuts, our reliance on the International Monetary Fund (IMF), and the need for sustainable, bold solutions to propel Ghana’s economy forward.
Rethinking the Debt Exchange Program and Haircuts Ghana’s current Debt Exchange Program has caused significant concern among both individual and institutional bondholders. While we understand the necessity of restructuring our debts to avoid default, the program must be carefully recalibrated to protect citizens’ investments,
particularly pension funds and the financial security of retirees. The introduction of haircuts, though unavoidable in some cases, requires greater transparency and fairness. A more participatory approach, engaging all stakeholders in meaningful dialogue, is essential to restoring confidence in our financial system.
The long-term impact of such policies on the banking sector, private investments, and public trust cannot be overlooked. Your leadership must ensure that these measures do not disproportionately burden vulnerable groups, undermine financial inclusion, or compromise economic growth.
A Sustainable Exit from IMF Dependency
While the IMF program provides temporary fiscal support, Ghana’s reliance on such
interventions cannot be a permanent feature. This cycle of dependency stifles our sovereignty and creativity in crafting homegrown solutions. To break free from the IMF, we must focus on:
1. Revenue Mobilization: Improve tax compliance through digitalization and enforcement mechanisms while expanding the tax net. For example, the Ghana Revenue Authority’s successful e-levy initiative to capture informal sector transactions could be enhanced with lower rates but broader acceptance, ensuring compliance without stifling economic activity.
2. Expenditure Rationalization: Reduce non-essential government expenditures and review public sector wages and perks. The recent scrutiny over government vehicle acquisitions provides an opportunity to implement a centralized vehicle management system, ensuring efficiency and reducing costs.
3. Domestic Resource Utilization: Leverage Ghana’s natural resources to foster industrialization. Aggressively pursue value addition for commodities like gold, cocoa, and bauxite. For example, expanding facilities like the Tema-based cocoa processing factories could create jobs and increase export revenue.
4. Strengthening Local Industries: Provide incentives for SMEs and prioritize local production to reduce imports. The "One District, One Factory" initiative can be revitalized to include specialized industries that cater to both local consumption and export.
Improving Economic Performance through Fiscal Policy
A prudent and forward-looking fiscal policy is key to Ghana’s economic recovery and growth.
Key considerations for your tenure include:
1. Debt Sustainability: Prioritize sustainable debt levels by negotiating better terms with creditors and focusing on concessional loans. A practical example would be to replicate Kenya’s successful Eurobond refinancing approach, which reduced interest rates by securing longer-term debt at favorable conditions.
2. Targeted Investments: Redirect resources into high-impact sectors such as agriculture, renewable energy, and technology. For instance, Ghana’s Savannah Accelerated Development Authority (SADA) regions could be revamped to become hubs for solar farms, tapping into global renewable energy investments.
3. Monetary and Fiscal Policy Coordination: Work closely with the Bank of Ghana to curb inflation, stabilize the cedi, and maintain investor confidence. The recent
"Gold-for-Oil" barter system initiative to ease pressure on foreign exchange is a promising strategy that requires refinement and scalability.
Bold Solutions for Economic Transformation
1. Public Sector Reforms: Implement performance-based evaluations in the public sector to increase accountability and efficiency. For instance, digitizing land records and reducing bureaucracy in land registration, as piloted in parts of Greater Accra, can eliminate corruption and unlock investments in real estate.
2. Social Protection Programs: Expand social safety nets to protect vulnerable groups during economic reforms. LEAP (Livelihood Empowerment Against Poverty) can be restructured to include vocational training alongside cash transfers to foster long-term self-reliance.
3. Private Sector Collaboration: Engage the private sector as a critical partner in development, particularly through Public-Private Partnerships (PPPs) in infrastructure, education, and healthcare. For example, Ghana’s PPP on the Accra-Tema Motorway demonstrates how such initiatives can reduce government financial burdens while delivering essential infrastructure.
4. Data-Driven Policy Making: Establish an independent economic advisory council to provide non-partisan, evidence-based policy recommendations. This could emulate the success of countries like Rwanda, which has used similar mechanisms to develop strategic national policies.
5. Diaspora Engagement: Create attractive investment packages for the Ghanaian diaspora, focusing on real estate, technology, and agro-industries. The diaspora bond initiative recently launched needs robust marketing and transparent structures to succeed.
Conclusion
Hon. Minister, your appointment marks a pivotal moment for Ghana. The path ahead requires courage, innovation, and an unwavering commitment to prioritizing the welfare of Ghanaians.
By building trust, fostering inclusiveness, and implementing bold solutions, your leadership can pave the way for a resilient and self-reliant economy. We, as citizens, are rooting for your success and are eager to support initiatives that align with our collective interests.
May you have the vision and fortitude needed to steer our economy towards stability and prosperity. The future of our nation depends on the decisions you make today.
Yours respectfully,
Sandra Adamah
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