Vice President Dr Mahama Bawumia is making a case for Ghana to have a second look at the foreign exchange regime.
He explained that the country cannot tackle the economic crisis without addressing the fiscal and debt sustainability, the production side as well as the foreign exchange regime.
Speaking at the opening of the StanChart Fintech festival, an annual event to assemble experts to discuss how to use technology to propel growth the financial sector on Wednesday October 26, he admitted that achieving fiscal and debt sustainability is not easy task.
“Restoring fiscal and debt sustainability is not going to be easy, it will require very bold, difficult but firm decisions. I think these are part of the discussions that we are having with the IMF and I am sure once these are concluded it will be clear that it will not be and it should not be business as usual, because we have to adjust to the new global and domestics realities.
“What we are also seeing is that, the nature of production needs to change. Why do I say that?
“You are seeing Ghana consistently, over the last five years, having more and more trade surpluses but at the same time we have had these trade surpluses on our balance of payments.
“This is like the first time in about twenty years that we have had consistently, about five years of trade surpluses on our balance of payment, at the same time we are having a lot of current account deficits, which means that a lot of the foreign exchange that we are earning from our trade doesn’t stay in Ghana,” he said.
He added “One of the areas where we have to address this is to reduce the import dependency that we have as a country. There is soo much when you look at the broad spectrum, from toothpick to tomatoes to rice and maze, and so there is a very high dependency but as the global economy is going to realign to the new reality with more self-reliance Ghana cannot be left behind.
“We also have to look very closely at how we enhance domestic production and reduce dependency on imports for commodities that we can very easily produce here in Ghana.
“We also have to look very clearly at our foreign exchange regime. It is very clear that it is quite loose and this is why we are going to be working to see how we can tighten the foreign exchange regime.
“Of course, I think that some of the details around some of these pillars I am talking about, when the president addresses the nation hopefully by the end of the year, some of these details will be fleshed out in more specifics.
“In broad terms, you cannot address the current economic crisis without addressing the fiscal and debt sustainability, without addressing the production side, without addressing the foreign exchange regime and what allows us to lose a lot of foreign exchange. But, more importantly, if we are going to address this, the economy must be digitalized and that is something we have started since 2017.”