He opined that the government has to urgently take measures to bring Ghana out of the current economic hole in order to prevent the country from defaulting on its current looming debt levels.
“Fifteen African countries have registered single-digit inflation during this same period including Togo, Ivory Coast, Morocco, Kenya, Uganda and so on. These countries didn’t jump over Covid-19 or the Russia – Ukraine war. We are doing something wrong in Ghana, it is a leadership problem,” he noted.
In an interview with Joy News, Dr. Kwabena Duffuor rather attributed the pressure on the Ghanaian currency to a lack of US dollars in the system as a result of excessive government borrowing as well as structural defects in our mineral and oil export arrangements to balance our payments.
“Less than 20% of our total export earning impacts on Bank of Ghana’s cash flow, according to data from the Ministry of Finance itself. That is a big problem’’. He continued, “take for example oil exports for 2021. Ghana exported 3.9b USD worth of oil but Ghana actually earned only 513m USD out of the total export while 3.4b USD went to the owners of the oil companies’’.
He added, “at the same time Ghana spent 2.7b USD to import petroleum products for our own local consumption and this is where we have the structural difficulties with our balance of payment’’.
The former Bank of Ghana governor said Ghana’s economy faced similar challenges of inflation during his time as finance minister under President John Evans Atta Mills but working with ideas from the Economic Advisory Council set up by President Mills and whose members included the World Bank economist Dr. Gobind Nankani, Professor Kwesi Botwe, Togbe Afede XIV, and others, they formulated prudent monetary policies to stabilize the cedi.
“We cut down government expenditure drastically especially when there is a revenue shortfall and you cannot borrow anymore…”
The former finance minister said government must do some of these things urgently because the country is sinking and cannot afford to wait for the IMF.