Introduction

Deputy Managing Director of IMF, Antoinette M. Sayeh, poignantly stated that “Countries that have strong economic institutions respond more effectively to crises and are better prepared for a resilient recovery. And that is true across any level of development”.

We are told by the IMF that, the excruciating economic hardships Ghanaians are experiencing today which are unprecedented in their scale, and unbearable in their impact are caused by the global pandemic and Russian - Ukraine war. Can our porous institutions be the reason why such external factors have crucified our economy to the point where we can barely afford our local goods?

Any leader who intends to build an elastic economy for this country should take cues from these thought-provoking statements in order to build robust institutions to help create a better economy for this nation.

Again, Austrian-American Consultant, Peter Drucker, posited that ‘the ultimate resource in economic development is people. It is people, not capital or raw materials that develop an economy’.

As a country saddled with an abundance of resources that have proved more of a curse than a blessing, the foreword is the answer to the very many questions we have raised as to why our economy continues to plummet despite all the resources we have.

This article criticizes the current state of the Ghanaian economy as well as suggests ways to build a strong economy in this current dispensation.

Analysis

According to a journal by Africa Portal, Ghana’s per capita GDP rose to Middle-Income Country (MIC) level as defined by the World Bank.

However, in 2021, the IMF downgraded Ghana’s economic classification from a low-middle-income country to a low-income developing country. Further reports stated that both reports were in fact, very different and it was an impediment to not confuse the two. The country’s right status was highlighted to be a low-middle income country.

At the grassroots, there seems not to be a bit of difference as the standard of living continues to shoot exponentially day by day. As of October 2022, one US dollar stood at fourteen Ghana cedis, five pesewas, a phenomenon that has led to a radical spike in prices of food, fuel, and other commodities.

The increasing inflation rate of the economy has been attributed to the excessive importation of goods into the Ghanaian market. Though an easily identifiable problem, this canker is not exactly an easy bet for the country.

The Ghanaian economy has not changed much since its pre-colonial days, it was a Guggisberg economy then and it is still a Guggisberg economy now. The country relies heavily on the little foreign exchange derived from the export of raw materials and does little to process it into secondary products.

As a result, the commodity gap in the market has to be filled by importation leading to an influx of foreign goods on the market, thus worsening the economy, the job market (the slow deterioration of the Ghanaian manufacturing sector), and the currency. In the event that the value of imports exceeds the value of their exports, this leads to an unfavorable balance of payment.

The constitution of the Republic of Ghana in Article 36 (1) enjoins the State to: “... take all necessary action to ensure that the national economy is managed in such a manner as to maximize the rate of economic development and to secure the maximum welfare, freedom, and happiness of every person in Ghana and to provide adequate means of livelihood and suitable employment and public assistance to the needy.”

To ensure the implementation of the foregoing, among others, Article 36 (5) requires that: “... within two years after assuming office, the President shall present to Parliament a co-ordinated programme of economic and social development policies, including agricultural and industrial programmes at all levels and in all the regions of Ghana.”

Building a strong economy out of the proverbial ashes that we have on our hands at this moment in time is possible. Zambia has managed to reduce the inflation rate from 24.4% in August 2021 to 9.7% in October 2022.

The giant economies in the world have survived through peculiar circumstances and they emerged with watertight bustling economies which literally hold the global economy. To bolster the economy, the economy can adapt strategies some of which have been listed below.

Domesticating the economy

To begin with, the government can strengthen the economy by cutting excessive importation and domesticating the economy. Professor John Kwaku Mensah Mawutor in August lamented that “If you have an economy where the very thing that you consume, much of them are produced by outsiders and you need a foreign currency to procure them, by so doing there will be so much burden on your currency.

Once there is a burden on your currency, it means that it will surely escalate in prices because you do not buy using cedi”. There is no scintilla of doubt that excessive importation cripples the economy by crippling local infant industries, leads to a balance of payment deficit, and worsens the currency value.

A country has a trade imbalance when the entire dollar value of its imports exceeds the total dollar value of its exports. This indicates that the nation exports less commodities than it imports.

A country's currency loses value as compared to the currencies of its trading partners when its trade imbalance widens. Ghana has consistently imported more commodities throughout the years than it has exported to its trading partners, causing the cedi to fall in value in comparison to the dollar and other currencies.

Ghana imports almost everything. Domesticating the economy at this crucial time should be a national priority and this can be done by prioritizing agriculture. Dr. Henry Herbert Lartey in 2014 suggested that “A long-term way of reducing inflation and thus restoring some confidence in our national currency is to produce, produce and produce and export, export and export

Ghana can earn dollars, euros, Pound Sterling and other currencies (foreign reserves) by producing”.

Mr. Yaw Osafo-Maafo, the Senior Minister emphasis on why to domesticate the economy at the opening ceremony of the Sixth Edition of the Ghana Economic Forum at the Kempinski Gold Coast City Hotel in Accra succinctly stated that “It is time to come on board to domesticate the economy to make Ghanaian businesses play a key role in resolving the challenges.

“Ghana must play a leading role, this means that our laws must support the private sector together with the captains of the industries so that the Ghanaian will be on the steering wheel directing the economy”. He further stated that “there will always be pressure on the local currency due to the high importation of goods to satisfy customers”.


In the case of The Attorney General v Balkan Energy Ghana Ltd and Others (J6/1/12) [2012] GHA SC 35 (16th May, 2012), Dr. Date Bah JSC stated as follows; ‘One of the values of the 1992 Constitution is the promotion of probity and accountability. In the proposals for a Draft Constitution of Ghana prepared by the Committee of Experts appointed in 1992 under PNDC Law 252 to draft the proposals that were placed before the Consultative Assembly that formulated the 1992 Constitution, the committee makes this important point in the General introduction to its proposals (paragraph 6 on page 5);

“With respect to the development within the past 10 years, the guiding principle was that the essential attributes of institutions which are compatible with a constitutional order should be retained, subject to modifications as are appropriate. The committee feels that in this regard, the accent should be on substance not form. Thus, for example, the social or political values of accountability and probity and fidelity to the public interest should survive the inauguration of the Constitution…”

This is the time we expect the executive to push the bill of Price Control Mechanism in parliament for it to be passed as a law to regulate the astronomical price increases in the market sector.

Public officers

With regard to public officers, this is the time to show outstanding commitment toward nation-building. Her Ladyship Adinyira in her activism towards defending the Constitution in the case of Okudzeto Ablakwa & Another v. Attorney-General & Obetsebi Lamptey [2011] 2 SCGLR 986 said that “… no public officer should conduct himself in such a manner as to be in clear breach of the provisions of the constitution. She added that can be done by ensuring probity, accountability, and good governance”. [emphasis ours]

Taxes

Further, the government can strengthen the economy through the imposition of taxes. Taxes are a great source of revenue for every government. We recommend that there should be more education on the Electronic Transaction Levy for taxpayers to accept to pay the E-levy.

Moreover, the government should put measures in place to avoid multiple taxations through the Electronic Transaction Levy.

The government should ensure transparency and accountability in the use of E-levy. If the people recognised that, their taxes are being made judiciously, it will enhance the payment of the E-levy.

Conclusion

From the above analysis, we consider these realities to be obvious. Not only does the implementation of these strategies lead to a more efficient economy, but it also provides employment opportunities and improves the livelihood of its citizens.

That, all men are equal by birth, and individuals possess certain inalienable rights that were given to them by their creator (among these are life, liberty, and the pursuit of happiness), governments are established among men to protect these rights through strong economic institutions.

Whenever any form of government becomes destructive of those ends, it shall be the right of the people to alter or abolish it, and to institute a new government, laying its foundations upon such principles, and organising its powers in such form, as shall seem to them most likely to affect their safety and happiness.

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