Senior Lecturer and Programme Coordinator of the Economic Policy Management Programme in the Department of Economics, University of Ghana has backed claims by the Vice President that factors which have contributed to the ailing economy are entirely external.

Speaking on the Super Morning Show, on Friday, Prof Ebo Turkson reiterated that factors like the Covid-19 pandemic, and the Russia-Ukraine crisis, have all had a ravaging effect on the economy.  

“There’s no doubt that Covid-19 has dealt a devastating blow to the public finances of most countries and Ghana is no exception.

He noted that prior to the pandemic, our macro indicators, looked quite positive, however, the sudden outbreak of the pandemic and the subsequent interventions rolled out to deal with the crisis, derailed the economy.

“The 2020 budget gave us a lot of hope of our economy bouncing back after the IMF programme and looking more like an economy that was going to in the immediate to medium term, build some resilience in tackling some of the structural bottlenecks that our economy has experienced since independence.

“Then Covid-19 came. Tax exemptions were given to the frontline workers and all, which contributed to the sharp decline in the revenue,” he said.

He also mentioned that the cedi depreciation has also played a role in this, adding that “at the same time the cedi was depreciating, the tensions in Europe, regarding the Russia-Ukraine war, started increasing oil prices and…that is the part of the reasons why as we speak, there are a lot of Ghanaians who have to live through hard times”

“And these are the sort of things that have a direct impact on the economy and external factors that we cannot do anything about as we speak. So I agree entirely with the Vice President that there are external factors that have brought us to this point,” he maintained.

He, however, believes that one way of building resilience is by addressing the structural bottlenecks of the economy.

“The problem with our economy is the structural bottlenecks that have to be corrected, which includes low resource mobilisation. We are not raising enough domestic revenue,” he stressed.  

“If our economy was resilient, if we had domestic resource mobilisation sources, then we could have tried to see how best we can rationalize our expenditure and take some decisions that move some essential items.”

“If we do not try to remove these bottlenecks, every external shock that hits us will send us off, and it doesn't matter the government in power,” he said.

This comes after the Vice Presidents' address on Thursday, April 7, 2022. The Vice President spoke at an event organised by the Tertiary Education Confederacy of the New Patriotic Party (NPP). Dubbed, the National TESCON Training and Orientation Conference, it offered an opportunity for him to speak on the prevailing economic challenges in Ghana.

Dr. Bawumia spoke about a number of issues regarding digitalization and the state of the economy. One of the many questions many Ghanaians were expecting him to address was the justification for the e-Levy, but Dr. Bawumia only mentioned it in passing.