Audio By Carbonatix
Finance Minister, Ken Ofori-Atta, has been urged to embark on comprehensive fiscal measures to complement monetary measures by the Bank of Ghana to restore economic stability and confidence.
Some financial observers have cautioned that investors will continue to shun government Treasury bills until the Finance Minister embarks on tight fiscal policy to bring down inflation, which hit 23.6 percent in April.
Speaking to Joy Business, Economist, Professor Lord Mensah, warned that investor confidence will continue to decline until inflation is stabilized.
“Government has been struggling to meet its target because the investor community has started shying away from short term investments, “Professor Mensah said adding that the uncertainties in the money market has made investors skeptical.
He stated for example that, investors are rationale business owners who always respond to activities in the market.
According to him, uncertainties create unpredictable future - a situation investors watch out for before committing their funds.
“Usually when uncertainties are so high in the system, most of the investors move their funds from the long term to the medium term. If the uncertainties continue to get deeper, they move their funds to the short term. If the investor is not comfortable at the short term then it means the economy is not doing well,” he explained.
He maintained that one of the major ways for judging confidence in an economy is to examine where and how investors are willing to invest their funds.
“With high inflation investors know that the value of their investment will be eroded. For me, the most important thing to do now is to work and bring inflation down”.
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