Dr. Osei-Assibey pushes for supply side policies
Senior Lecturer at the Department of Economics, University of Ghana, Dr. Eric Osei-Assibey, has reiterated the need for prudent and balanced policies to prop up the productive sectors even as government works to stabilise the macroeconomy.
Addressing a gathering of policymakers and the business community at the maiden National Policy Summit (NPS) in Accra, he indicated that most of the government’s policies were demand-driven, with very little focus on the supply side.
“Of course, we need to facilitate macroeconomic stability with prudent policies to trigger the private sector to play its central role as the engine of growth; but such policies should not be only demand-driven but also balanced to serve the interest of the supply side or productive sectors.
No matter how well the macroeconomic setup is improved, if we have a weak productive structure that drags the ability of the productive sectors to produce more to increase export and trade value, then it’s not going to be sustainable.”
Tax reductions, fiscal consolidation and the tightening of monetary policy, are all good, but they must be backed by supply side policies that will serve the course of the real sectors—agriculture, industry and services.
“For government policies to be sustainable, there should be a balance between macroeconomic policies and supply side policies.”
Strong infrastructure, he added, is key to creating the enabling environment, and improving productivity of producers to reduce the cost of production and bolster export to generate more revenue.
Action, he added, is also needed and not mere talk as previous examples show.
“The question is: what will the situation be in the next three four years to come? Are we going to be here again talking about macroeconomic instability, high inflation and interest rates, exchange rate instability etc.
This question is important because this is not the first time we are having policy summit and fora but that has become cyclical as we have all the discussions and somewhat “go to sleep”. There are good policies on paper but the action plan has always been missing.”