Finance and risk management expert, Ken Thompson, has said the recent review of Ghana’s base year from 2006 to 2013 does nothing to improve the economy.
The CEO of Dalex Finance said Monday that, at best, the rebasing of the economy will only allow the government to borrow more, but warns, “you can borrow as much as you like but can you pay for it?”
He made the comments on late-night current affairs programme, PM Express on the Joy News channel. Ghana’s economy expanded by some 24.6 per cent for last year following the rebasing by the Ghana Statistical Service (GSS). The GSS reviewed the base-year from 2006 to 2013, altering the way the economic growth of the country is calculated.
Discussing challenges facing Ghana’s economy on PM Express, Mr Thompson noted that the changes in the economic figures occasioned by the rebasing will do little to the living conditions of Ghanaians.
“So your grandfather left you a house and it is revalued. It used to be 5,000 cedis, now they say it is 10,000 cedis, not a big deal. It is still your grandfather’s house. It doesn’t really mean anything in terms of the value of the cedi in our pocket.
“It doesn’t mean our debts are lower, it doesn’t mean we are increasing income, it doesn’t mean we have cut expenditure, it doesn’t mean we are paying less interest [on loans]. It doesn’t mean that” he said.
He wants the government to adopt trusted strategies that can ease the pressure on the depreciating cedi.
Mr Thompson predicted that the cedi will continue its downward decline against the dollar and other major trading currencies unless Ghana takes firm steps to improve its exports.
“75 per cent of containers that come into this country go back empty…So if you want your currency to be strong, fill those containers. You can’t have a strong currency when you import everything, it is not possible,” he said.
President Addo Dankwa Akufo-Addo settled what is usually a political-skewed debate about the economic situation when he admitted the economy of Ghana is going through trying times.
While dismissing concerns that these difficulties amount to a crisis, he conceded that the economy was in “difficult times.”
He, however, assured Ghanaians that the government is on top of the situation.