Speaking on PM Express Business Edition on Thursday night, Mr Terkper stressed the importance of building financial buffers to prepare for future shocks.

“Stability is not forever,” he warned. “You cannot manage an economy continuously for four years without one crisis or the other.”

Backing President Mahama’s recent call for caution despite the prevailing macroeconomic calm, Mr Terkper said, “President John Mahama is saying things are going well, but let’s be careful. Let’s make sure that when the trend starts to reverse, we have reserves.”

He described the process of building reserves as a necessary sacrifice. “To set reserves—just as households and businesses do—is sacrifice. When the chips are down, we must fall on them to stabilise the situation.”

Mr Terkper emphasized that economic management must anticipate downturns. “That is how to sustain reforms. It’s good to stabilise, but it is better to sustain.”

On Ghana’s revenue outlook, he acknowledged that the suspension of certain import levies could have an impact.

“Our revenue today—not just tax revenue—is about 17–18% of GDP. But our tax-to-GDP ratio is only 15%,” he noted. “That’s low for a middle-income country like Ghana. Even for an African country, it should be 17% or 18%.”

He said this is why the government is seeking technical assistance to improve the VAT regime. “That’s why the president, the minister, and others have spoken about getting support to bring VAT back to where it was.”

Mr Terkper explained that some levies introduced during economic downturns were always meant to be temporary.

“We’ve had a temporary levy policy. You use them during austerity, then remove them later. These are counter-cyclical measures,” he said.

Citing the COVID-19 pandemic as an example, he noted how sectors like telecommunication and digital services experienced a boom. “That’s when you got your Financial Sector Levy. Not all sectors suffer during a crisis—some thrive, and that’s where temporary levies are useful.”

He warned that future crises, such as potential health emergencies like Mpox, must be anticipated.

“Have we put some reserves aside, learning from COVID? So that when Mpox comes, we fall on those reserves to manage?”

Mr Terkper stressed that such preparedness is not economic manipulation but sound management.

“This is not about manipulating the economy. No. You are only managing it because of the inevitable ups and downs.”

He concluded with a sobering reminder: “You cannot manage an economy without a crisis. The question is whether you are ready when it comes.”

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This report highlights Ghana’s impressive performance among 31 African countries, underscoring the nation’s strengths in forex stability and liquidity, economic freedom, inflation control, and political stability.

RMB’s assessment covers four key pillars: economic performance and potential, market accessibility and innovation, economic stability and investment climate, and social and human development.

Ghana also excels in other areas, ranking 3rd in social and human development, 6th in market accessibility and innovation, and 15th in economic performance and potential.

Overall, Ghana is ranked as the 6th most investable country on the continent, with an index score of 0.24, following Seychelles, Mauritius, Egypt, South Africa, and Morocco.

However, when excluding smaller economies like Seychelles and Mauritius, Ghana emerges as the 4th most attractive investment destination, trailing only Egypt, South Africa, and Morocco.

With a GDP of $76 billion and a population of 33.5 million, Ghana presents a significant market, ranking among the top ten in urbanization, innovation, political stability, personal freedom, and employment.

The country also ranks favourably in corruption control and is a leader in import concentration.

Despite these strengths, the report emphasizes the need for Ghana to address its high public debt and inflation to maintain macroeconomic stability, particularly under the ongoing $3 billion IMF extended credit facility program (2023-2026).

On a positive note, signs of fiscal consolidation are emerging, with the fiscal deficit projected to shrink to 4.6% of GDP by the end of 2023, down from 10.7% in 2022. Even with lower oil revenues, overall revenues and grants have remained steady at 15.7% of GDP in 2023.

Looking forward, the report anticipates accelerated growth for Ghana by 2027, fueled by increased gold and oil exports from new projects.

The RMB report is based on 20 metrics across its four pillars, drawing on data from global institutions such as the World Bank, IMF, African Development Bank, United Nations, and International Labour Organisation.

Source: Adomonline

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