President John Mahama’s defense of his economic record has generated a debate in the academic community as two top economists at the University of Ghana split heads over the matter.
The President on Tuesday said, in spite of the global economic challenges, Ghana’s economy is still resilient due to the measures his government has put in place.
Addressing a durbar of chiefs and people of Akwamufie in the Eastern Region as part of his “Accounting to the People” tour, the President noted that the economic situations in many countries worldwide are in crisis due to the fall in the world market price for crude.
“It’s not only Saudi but countries with huge foreign reserves of billions of dollars are facing financial challenges. Our own neighbour Nigeria is having economic problems because of the world prices of oil,” President Mahama said.
President Mahama explained further that, “Aside from that, other economies that don’t even have oil but are commodity exporters are facing an economic crisis. The price of gold has collapsed, the price of many commodities that are the principal exports of many countries have collapsed and so their economies are going through a crisis.”
“Because of prudent economic management, even though Ghana is experiencing a drop in the price of the oil that we export, we have sustained a drop in the price of our gold export for almost four to five years now, you will notice that our economy still remains resilient.”
Head of the Economics Department at the University of Ghana, Prof. Peter Quartey agrees with the president.
He said the president’s assessment largely reflects the situation on the ground.
“I agree with the statement. We have had a modest GDP growth rate around 4.5 percent. We can also talk about the deficit which was quite high in 2012, has reduced considerably. The exchange rate which has been 4 cedis to the dollar has also been stable,” he explained.
Prof Quartey added that “So if you look at these macro indicators then you’re tempted to agree with the statement.”
He added however that the current growth rate is not good enough if government if it intends to reduce poverty.
In a sharp reply, the head of Finance Department at the University of Ghana Business School, Prof. Godfred Bokpin disagrees to that assertion.
According to him, the economy is improving because of the IMF programme and not government’s policies.
“We are achieving some level of stability now probably relative to our peers or other countries because of the IMF programme. It will not be entirely true to blame whatever Ghana has been through entirely on external forces because of the huge deficit we recorded in 2012 as a result of the elections,” he said.
Prof Bokpin said, “So that analysis will not be fair. I think it has more to do with our own internal weaknesses that we exhibited when we went through the elections.