Finance Minister-designate, Cassiel Ato Forson, has proposed a two-pronged approach to stabilize Ghana’s economy: short-term measures to reduce inflation to 8% (±2%) and long-term structural reforms supported by a strong fiscal consolidation agenda and prudent expenditure management.
Addressing concerns about the Cedi’s depreciation, which has exceeded 30% in recent months, during his appearance before Parliament’s Appointment Committee on Monday, January 13, 2025, the nominee emphasized that the Bank of Ghana cannot stabilize inflation of the Cedi alone. He stressed the critical role of the Finance Ministry in the process.
To tackle the Cedi depreciation, Dr. Forson explained that the new government intends to implement a strong fiscal consolidation agenda and focus on prudent expenditure management.
He underscored the importance of leveraging Ghana’s natural resources and assured the government would revise the palm and cocoa industries, as well as establish the Ghana Gold Program to utilize gold reserves to bring in the foreign exchange needed to stabilize the Cedi.
Dr. Forson also proposed shifting the focus from macroeconomic fixes to addressing critical microeconomic challenges, arguing that this would be a more effective solution for stabilizing Ghana’s economy.
He emphasized that microeconomic interventions must complement macroeconomic policies, criticizing Ghana’s overreliance on macroeconomic strategies, which, according to him, have led to temporary solutions rather than long-term stability.
“It’s important for us to understand that you don’t only grow the economy from the macro but also from the micro. You don’t necessarily create jobs only from the macro. You create jobs from the micro,” he said.
He called for a return to basics to fix the economy, acknowledging that Ghana has overly concentrated on macroeconomic strategies in the past.
Dr. Forson also drew attention to the decline in the cocoa industry, which has seen output fall from 968,000 metric tons per annum eight years ago to less than 500,000 today. He stressed the importance of revitalizing key sectors like palm oil and cocoa to generate revenue and stabilize the economy.
According to the National Democratic Congress (NDC) manifesto, the new government intends to focus on revitalizing these industries and establishing the Ghana Gold Program. This initiative aims to utilize Ghana’s gold reserves to bring in much-needed foreign exchange to stabilize the Cedi.
Dr. Forson pledged to prioritize job creation, economic stability, and price control during his tenure, should he be confirmed as Finance Minister. He assured the committee of his commitment to Ghana’s economic transformation, stating, “My priority is a stable cedi, low prices, and job creation.”
Zainab Ibrahim/thenewsbulletin.com