As the discussion around the International Monetary Fund’s (IMF) classification of Ghana as a low income developing country continues, the Head of the Institute for Statistical, Social and Economic Research (ISSER), Professor Peter Quartey has called on the government to focus on building a resilient economy that will thrive after the COVID-19 pandemic is dealt with.
According to him, the IMF’s assessment of Ghana as a low income developing country, a description which the Bretton Woods institution has used from as far back as 2017, lacks a broader developmental context.
In an interview with Citi Business News, Prof. Quartey acknowledged that the classification by the IMF points to Ghana’s short-falls when it comes to revenue mobilization and expenditure management, but maintained that in an era of COVID-19, focus should be on the productive nature of government’s expenditure and not necessarily on the expenditure numbers.
“We are very much aware that our Revenue/GDP ratio is below the Sub-Saharan Africa average, and we need to mobilize more resources. We also know that our expenditure as a percentage of GDP is also higher than the average. But having said that we also have to focus more on our resilient economic sectors, and also the recovery. If you look at our growth projections, we are projecting a modest growth rate that is quite respectable across the region and across the globe. So that is something we should also look at.”
“We shouldn’t just focus on our debt, our revenue, our expenditure and deficit. We should also look at economic growth, economic progress, human development in terms of access to education and health. Because after all, we need to fight this pandemic, so we live to see tomorrow. So if government borrows to spend, of course, it’s a problem, but it’s not too much of a problem. We ought to look at the broader picture, what benefit is that going to yield to the Ghanaian economy. For me, that’s the way to go. Borrow, but borrow responsibly, invest into productive activities that should be able to pay off the loan,” he added.