In the wake of COVID19, the world economy stands at an all time low. The US Economy alone may take three years to recover. Ghana’s Finance Minister reiterates that it will take the Ghanaian economy another three years to recover.
What does it mean for the Ghanaian? What is being put in place to make the average Ghanaian survive the scare? What does it mean for government debts and other matters arising with regards to our unstable economy? Personally, I believe the time has come for us to depress the economy.
What does it mean to depress the economy? We stand at an advantage to try our luck. The borders are closed. The country is literally in auto pilot mode. The socioeconomic impact has its own consequences as well. For as long as the Ghanaian people are held hostage by controllable so oo-economic forces, the government cannot afford to be indifferent to the ravages of poverty in all its dimensions and ramifications , Ibrahim Babangida notes once.
The economy of Ghana has a diverse and rich resource base, from exportation such as hydrocarbons and industrial minerals. These have given Ghana one of the highest GDP per capita in Wales Africa. Owing to a GDP rebasement, Ghana became the fastest growing economy in the world as at 2011 before dropping again.
Growth picked up traction in the final quarter of 2019, following the third quarter slowdown which was driven by downturns in the industrial and services sector. The PMI averaged slightly higher in the fourth quarter than in the third quarter and this showed that the business activities were solid on the ground at the end of the year 2019 amid strong output and new orders growth.
A depreciating Cardi might have curbed investment activity and household spending growth, as reflected by a dip in merchandise imports in fourth quarter. The private sector activity took the burden off at the outset of the year as the PMI weakened in January 2020. Not forgetting the higher prices for gold and cocoa boded well for the external sector in the same month. The economy was poised for a steady course before corona virus hit our nation’s capital.
A call for the president to close borders and restrict travel movements fell on deaf ears until Ghana recorded its first two cases. As it stands now, we are counting thousand plus infected persons. At a time when majority expected the president to extend lockdown, he lifted it. Ban on public gatherings still in existence anyway but at what risk cometh the decision to release the locks.
The President noted that his decision was taken after careful consideration of a number of factors. He cited that the country’s current capacity to trace victims of this disease, being able to test, being able to isolate and quarantine those people so that we take them out of the population, and, of course, the treatment, are some of the factors that led to the decision to lift the partial lockdown.
He went on to say that “we are also looking at the demography of the disease itself, in terms of the sick, in terms of death. What we will like to do, as decision makers, is to balance all these factors and to come to a conclusion and a set of solution that will benefit our people and of course, protect the economy of our country. All of these have been the basket of issues that have led to us to take this decision. That being said Ghanaians remain adamant that it is uncalled for and it is a wrong decision by the First gentleman of the nation.
As brilliant as it may sound, I believe the time has come for us to allow for more food production, more locally produced goods, etc to come into action. The time to depend on ourselves as a nation, to mine our own resources and stay within our own resources is now. The moment has arrived for us to take the risk and depress our already shaky economy.
Economic depression is a sustained, long term downturn in economic activity in one or more economies. It is a more severe economic downturn than a recession, which is a slow down in economic activity over the course of a normal business cycle. But if the economy is already declining, why not embrace it and switch to depending on your own resources rather than seek more loans and pile pressure on an unstable economy?
Economic depression takes about three or more years to recover and if we have three years to recover from the damage of corona virus then why not devise an initiative to rebuild on our own resources- minerals, cocoa, cashew nuts, food, and more. The government of Ghana must make the tough decision. It seeks to benefit us all in this trying times. The US market itself will rake three years to recover and they are a better economic powerhouse than us.
The government can then, if the corona is dealt with, open the gates to investors, cut down taxes and allow for even more investors to come and set up. Manufacturing and other necessary productions will be welcomed. There have been many periods of prolonged economic underperformance but it’s controversial to call them depression. It is rather recession.
A recession is a period of declining economic performance across an entire economy that lasts for several months. Recessions are visible in industrial production, employment, real income, and wholesale-retail trade. The long term macro economic trend in most countries has has been economic growth. Along with this long term growth, however, have been short term fluctuations when major macroeconomic indicators have shown slowdowns or even outright declining performance, over time frames of six months up to several years before returning to their longterm growth trend.
Ghana can benefit for an economic depression and recession. The two comprises of declining the economy but at a stage where we already lack the norm to rise above the scheme, we must take the risk and bend the curve. Blow out of proportion and go into recess. Allow for our local contractors, farmers, industrialists, and others to work with our own resources and pave the way for an economic upturn.
Economic sustainability, economic prosperity, economic growth, economic welfare, scale- up, I mean to say that Ghana stands to gain economic success if the people will accept the challenge and decline the economy. No more loans, cut taxes, allow more investors, allow for locally made goods, change the impact of exportation and limit importation. Let us live within our own resources.
The corruption and the power to take from the people will be reason why Ghana may not be able to depress its economy. The politicians are likely to fear losing money they may have invested in seeking political power. The shame of it all remains to be seen at the end of corona virus pandemic.
May God bless Mother Ghana!