68 years after gaining independence, cycles of unsustainable debt accumulation, fiscal distress, high unemployment and below-capacity production still define our economic journey.
The recently convened National Economic Dialogue (NED) initiated by President John Dramani Mahama was designed to solicit stakeholder views on breaking free from this pattern of financial dependence and chart a sustainable course for growth.
With an average of one International Monetary Fund (IMF) engagement every three to four years, the country has relied more on external interventions than on its own economic resilience.
Ghana officially joined the IMF six months after gaining independence – on September 20, 1957 – and has entered 17 different IMF-supported programmes, making it one of the most frequent users of IMF resources in sub-Saharan Africa.
Not a very exemplary demonstration of independence, one might add! The country has since continued its cycle of IMF engagements. Thus, the recently-held National Economic Dialogue (NED) sought to build consensus among stakeholders – policymakers, business leaders, academics and civil society – on strategies for economic transformation.
The objective is to reduce the nation’s dependence on external bailouts and put the country on a path toward fiscal and macroeconomic stability. Critics argue that the country’s repeated reliance on the IMF is perhaps the poster for economic mismanagement and overall governance failure.
If the NED is to have any lasting impact, it must provide a credible alternative to IMF dependence – one that ensures fiscal responsibility without external compulsion. Despite multiple tax reforms, government continues to struggle with revenue collection; partly due to inefficiencies, corruption and a narrow tax base.
Currently, the tax revenue-to-GDP ratio stands at around 13 percent compared to the African average of 16-18 percent. The reliance on indirect taxation including VAT, petroleum levies, and the controversial e-Levy has created a tax system that disproportionately affects lower-income earners while leaving large sections of the economy untaxed.
However, tax reforms alone will not be enough. Public sector wages, interest payments and subsidies continue to consume a significant portion of government revenue.
Without sustained political will, the NED will become yet another symbolic exercise – a platform for discussion rather than action.
Chairman-National Economic Dialogue, Dr. Ishmael Yamson, believes the private sector has a critical role to play in reviving Ghana’s struggling economy. He urges the private sector to take an active role in addressing the economic crisis rather than waiting for government intervention.
However, he stressed the importance of discipline and efficiency in private enterprise – which is sorely lacking in the public sector. Indeed, Dr. Yamson is very hopeful of the potential for economic resurgence if stakeholders work together.
To him, the National Economic Dialogue has signalled a renewed awareness among Ghanaians to right wrongs of the past. Ghana cannot afford to wait for change to come from the top anymore.
Dr. Ishmael Yamson cautioned that economic recovery cannot rely on monetary policy alone. “Without strong fiscal measures in place, monetary policy alone will not be able to stabilise the economy at the needed pace.”
A Planning Committee member, Professor John Gatsi, has emphasised an urgent need for the country to build strong financial buffers to end its cycle of repeated International Monetary Fund (IMF) bailouts.
To him, prudent economic management and financial resilience are key to breaking Ghana’s dependence on the IMF.
The current IMF-backed programme aims to restore macroeconomic stability and debt sustainability while fostering stronger, more inclusive growth.
Professor Gatsi is of the considered view that Ghana must develop robust financial safeguards to withstand economic shocks rather than turning to the IMF at every financial crisis.
Fiscal discipline, honest leadership and shared sacrifice highlight concerns about Ghana’s economic management. The point remains: can Ghana implement structural reforms independently or will it continue to rely on external interventions?
