WE NEED TO WORK HARDER (NOV 25)

THE global financial crisis is taking a toll on the economies of the world’s industrialised countries, and since most developing and emerging economies are linked to those of the developed world, the likelihood that developing countries will suffer most cannot be underestimated.
However, the good news is that the World Bank, the International Monetary Fund (IMF) and the International Finance Corporation (IFC) have said that Ghana’s economy is still robust and can withstand any likely difficulties from the fallout from the world economic crisis.
At the launch of the Kwadwo Baah-Wiredu Finance and Economic Journalist of the Year Award and economic seminar series in Accra yesterday, the three institutions were quick to add that there was the need for the country to focus more on domestic revenue mobilisation. The institutions also called for more expenditure control to ensure that the government did not over run its budget.
These disclosures should gladden the heart of every Ghanaian, but it must equally be noted that we should not become complacent just because the economy has scored good marks from the Breton Woods institutions.
The government should seriously be thinking of how to generate more revenue, while at the same time bringing its expenditure under control. The country has a sizeable current account deficit which it has, in part, funded through foreign borrowing, including the eurobond issue.
It is equally becoming a challenge to keep a lid on fiscal expenditure in the run-up to the elections. The temptation for ruling governments to spend heavily during election periods is very high and for that matter it will be difficult for Ghana to escape this trap. Be that as it may, the government should muster the political and economic will to control unnecessary and unplanned expenditure in the interest of sound economic growth.
The DAILY GRAPHIC believes the future of the economy rests on the government’s attitude to the country’s agricultural programmes to ensure that the country will be self-sufficient in food production all-year round.
With lower food prices, there is the likelihood that inflation will be contained, as the food component constitutes more than 50 per cent of the basket of the Consumer Price Index. The evidence is there for all to see, since the prices of foodstuffs dropped, the rate of inflation has inched slightly downwards over the last two months.
Furthermore, the government, in its efforts at making life easier for the ordinary man, recently reduced the ex-pump prices of petroleum products. This, however, has not trickled down to the ordinary person who uses tro-tros or taxis regularly. Drivers have refused to reduce their fares. The only beneficiaries of the reduction in the prices of petroleum products are private car owners.
Our position is that the government should have maintained the level of prices and channelled the revenue accruing from that into other important sectors such as the expansion of the school feeding programme, improving the road network or extending it to the food-producing areas and establishing small dams for irrigation.
It is our cherished hope that the various safety nets to absorb the meltdown of the global financial crisis between now and next year should be programmes that can be sustained till 2010 when we begin to factor in revenue from the oil boom and the West African Gas Pipeline project.
For now, Ghana has avoided the snares of the financial crisis. But what we are not sure of is the effect of the policy interventions from the industrialised nations next year. But our trump card lies in revenue mobilisation and expenditure control by growing what we eat and eating what we grow.