KUDOS, ECONOMIC TEAM (DEC 15, 2009)

THE macroeconomic stability achieved over the past 11 months by the Mills administration should give hope to Ghanaians that sooner than later the economy will be out of the woods.
With inflation further declining to 16.92 per cent at the end of November and the cedi performing strongly against the major trading currencies over the past months, one can only express confidence in the ability of the government to steer the economy towards consolidation and growth.
Although many analysts expected the decline in inflation, many did not expect the decline from 18.04 per cent to the current level, considering that throughout the year the rate of decline had been very marginal.
Macroeconomic stability has been achieved as a result of the government’s austere measures announced in the 2009 budget statement, but we recognise that it kept to stringent spending targets to put the economy on a stabilisation path.
The DAILY GRAPHIC thinks it is a mark of prudence on the part of the government to keep spending levels within the targets announced in the budget statement.
Again, many point to the tight monetary policies which have led to the non-payment of contractors for jobs executed, a development which, to some, has accounted for the macroeconomic stability.
The DAILY GRAPHIC is of the belief that in an economy where inflation hovers over and above 20 per cent, the private sector cannot do well to stimulate the economy. It also renders ordinary people, for whom the government initiates policies, more impoverished.
Governments all over the world strike a balance between lower inflation and investments in the productive sectors and this we think the government must work hard to attain.
We have every reason to believe that the needed impetus to push the economy towards the right path, as envisaged in the 2010 budget statement, will be pursued. This includes support for agriculture.
Considering the fact that the food component of inflation plays a critical role in reducing cost of living, the government must do everything possible to cushion the country against food price hikes through its agricultural policies.
That, we think, will also serve as a shock absorber for the economy should the non-food component, mainly on account of crude oil price hikes on the international market, go beyond our control.
However, the DAILY GRAPHIC cautions that in pursuing growth, care must be taken not to throw away the stabilisation achieved so far.
Nonetheless, we think that the government must necessarily spend, especially in the productive sectors of the economy that have the potential to generate jobs and incomes for many of our people, given the government’s critical role in the economy.
However, such spending should be within tolerable levels in order that we do not create the conditions that necessitated the fall in the cedi and high levels of inflation and national debt.
The DAILY GRAPHIC commends Dr Kwabena Duffuor and his economic management team for implementing sound economic measures that have led to a significant reduction in the fiscal and external deficits.
Let us have more of such pragmatic policies next year in order to create more jobs and prosperity for the people.