Although Ghana’s Gross Domestic Product (GDP) is increasing, according to Professor John Gatsi, dean of the University of Cape Coast’s business school, the growth has little bearing on the nation’s circumstances.
He was responding to the Finance Minister’s claim that Ghana’s GDP growth rate is improving, Mr. Ken Ofori-Atta.
According to the Minister, this development provides the government with a strong base to meet the upcoming difficulties.
Addressing a press conference in Accra on Wednesday September 28, Mr Ofori-Atta indicated that overall, Ghana’s growth outturn of 3.4% and 4.8% in Q1 and Q2 of 2022 respectively, coupled with modest improvements in our fiscal position, suggests the economy is gradually on the upswing despite the numerous shocks that the country has faced over the past two years.
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“These figures demonstrate that in spite of recent challenges, there has been economic growth, modest as the gains so far may be.
“This progress gives us a solid foundation to confront the challenges ahead. Undoubtedly, global risks remain on the horizon, including a strengthening US dollar. and higher interest rates which negatively affect external borrowing.
“This development is exerting enormous pressure on our Balance of Payment position, and thus the need for us to expedite our engagement with the IMF.”
He added “Within this context, Government is finalizing its Post-COVID-19 economic programme as the domestic blueprint to engage the IMF.
Reacting to this on the Ghana Tonight show with Alfred Ocansey on TV3 Wednesday September 28, Professor Gatsi said “I think in the scheme of things it doesn’t impact in anyway.
“When we are dealing with the fiscal situation as well as growth, it is expected that the growth rate will be higher than the real cost of borrowing. Now, the real cost of borrowing during the period that the Finance Minister is making reference to, is substantially [lower] than the growth rate within the first and second quarter. Therefore, what follows is that you will need more fiscal desperation in order to survive.”
