By Emmanuel ACQUAH-SAM (Dr)
Ghana recently held a National Economic Dialogue to address the country’s economic challenges. While this initiative reflects the government’s commitment to broad consultation, its effectiveness is questionable. Political parties already have economic blueprints outlined in their manifestos, shaping national economic policy.
A more pragmatic approach would involve sectoral dialogues that focus on specific industries, engaging experts to propose targeted solutions. This article advocates for sectoral dialogues as a superior alternative to a general national dialogue and presents viable solutions to Ghana’s economic challenges.
Ghana’s economy faces multiple structural and macroeconomic challenges:
- High inflation: Inflation remains elevated, reaching 23.5% in January 2024, eroding household purchasing power and increasing the cost of living (Ghana Statistical Service, 2024).
- Debt burden: Public debt surged to GH₵ 610 billion (US$50 billion) by December 2023, leading to high debt servicing costs that constrain public investment (Bank of Ghana, 2024).
- Fiscal deficit: Persistent budget deficits, largely due to excessive spending and revenue shortfalls, undermine economic stability.
- Currency depreciation: The Ghanaian cedi depreciated by 13% against the US dollar in 2023, reducing investor confidence and affecting business operations (BoG, 2024).
- Unemployment: Youth unemployment remains high at 13.7%, as job creation lags behind population growth (World Bank, 2024).
- Overreliance on raw material exports: Ghana remains dependent on commodities like cocoa and gold, making the economy vulnerable to global price shocks.
Possible Solutions to Ghana’s Economic Woes
A combination of short-term stabilisation measures and long-term structural reforms is necessary:
Fiscal discipline: Enhance revenue mobilisation through improved tax administration and compliance. Reduce wasteful public spending and ensure fiscal transparency.
Industrialisation and value addition: Strengthen manufacturing to reduce reliance on raw material exports. Expand industrial parks and provide incentives for domestic production.
Agricultural modernisation: Invest in mechanisation, irrigation, and agro-processing to improve yields and reduce food imports.Implement policies to support commercial farming and agribusiness development.
Monetary policy management: Strengthen the central bank’s independence to ensure effective inflation control. Implement measures to stabilise the cedi and restore investor confidence.
Job creation and private sector support: Provide tax incentives and financial support for MSMEs. Foster innovation and entrepreneurship to expand employment opportunities.
Debt restructuring and management: Prioritise sustainable borrowing strategies to prevent excessive debt accumulation. Enhance transparency in loan utilisation and debt repayment plans.
Why Sectoral Dialogues Are Superior to a National Dialogue
A national dialogue promotes inclusivity but often becomes politicised and lacks sector-specific depth. Sectoral dialogues offer a refined approach, allowing policymakers, industry experts, and stakeholders to:
- Identify precise challenges within key sectors.
- Develop targeted, evidence-based solutions.
- Implement best practices tailored to industry needs.
- Ensure continuity in economic reforms through expert-driven policies.
A national dialogue may generate broad recommendations that are difficult to implement effectively. In contrast, sectoral dialogues focus on pragmatic and tailored interventions, ensuring that policy decisions are based on empirical evidence. A clear example of the effectiveness of sectoral dialogues was the government-led Educational Sector Dialogue, held before the National Economic Dialogue.
A dedicated committee facilitated public contributions to key issues in education reform, leading to actionable insights and more structured policy interventions. This precedent underscores how sectoral dialogues can foster meaningful discussions and yield tangible results compared to broad national deliberations.
Policy Implications of Adopting Sectoral Dialogues
Transitioning to sectoral dialogues requires policy reforms in key areas:
- Sector-Specific Policy Committees: Establishing permanent advisory bodies for finance, agriculture, industry, and technology to ensure continuous assessment and reform.
- Institutional Collaboration: Strengthening coordination between government, academia, and the private sector to drive policy formulation.
- Decentralised Decision-Making: Empowering regional and sectoral agencies to implement targeted economic strategies.
- Data-Driven Policymaking: Relying on empirical research and sectoral data rather than broad-based assumptions.
Conclusion and Recommendations
While national economic dialogues offer a platform for discussion, they often fail to produce sector-specific policy actions. Ghana’s economic recovery requires a pragmatic, precision-driven approach through sectoral dialogues with expert contributions. The government should:
Adopt a sectoral dialogue framework where policymakers, industry leaders, and researchers develop industry-specific solutions.
Establish policy monitoring and evaluation systems to track the implementation and effectiveness of sectoral recommendations.
Encourage public-private partnerships (PPPs) to drive investment and innovation in key sectors.
Ensure policy consistency and execution by translating sectoral recommendations into concrete economic reforms.
Ghana’s economic future depends on targeted interventions rather than broad discussions that risk becoming political rhetoric. A sectoral approach will provide the technical expertise and actionable policies necessary to drive sustainable economic transformation.
The writer is a Senior Lecturer, Wisconsin International University College, Ghana
