AN economist, Mr Kwame Pianim, has said that governments should manage budgets efficiently to make proceeds from the oil resource an additional fund for extra investments.
Mr Pianim, who is also the Chief Executive Director of the New World Renaissance, said proper management of the economy was key to generating the needed financial resources for development.
He said if policy makers did not ensure fiscal discipline through proper management of the budget, the oil revenues would only be used to balance budget deficits and not come in as an additional resource for developmental projects.
Mr Pianim made the observations when he chaired a lecture in Accra as part of the Economic Development Lecture Series of the Department of Economics of the University of Ghana.
The main lecture was delivered by Mr Tony Killick on the topic “Ghana’s quest for sustainable growth and development strategies: Can Ghana’s economy go on like this?”
The Ghanaian economist said although there had been progress in the economy, there were also challenges that needed prudent measures to overcome.
Mr Killick, a former economic adviser to the Busia administration, in his lecture said the country’s economy had progressed on a chequered path.
The country, he said, needed to sustain the progress made so far and build on it, as lessons from past economic management, policies and implementation showed that “Ghana has been the author of its own economic fortunes, for ill and for good.”
Tracing the historical path of the country’s economic progression, Mr Killick described four periods from the 1970’s and the main economic policy arrangements that had impacted on the whole economy.
He described the periods between 1973 to 1982 as the black years of collapse in government revenues and uncontrollable government spending with resultant inflation among others.
The years of economic recovery programme of 1983 to 1992, he said, was the time economic sanity was instituted and that was “a major achievement.”
Mr Killick said the democratisation years of 1993 to 2002 following the adoption of the 1992 constitution was a landmark, but was quick to add that weak economic management persisted until between 2003 to 2006, where “the new government begun to get a grip on public finances and economic polices.”
In all these periods, weak management of the economy persisted until 2003 to 2006, a period of “re-balancing”, where “the new government begun to get a grip on public finances and economic polices,”
Painting the current picture, Mr Killick said although rapid improvement have been noted in certain sectors of the economy, the disparity in the economic fortunes of people living in the north as compared to those in the south was “a serious blemish on the record of improvement.”
Moreover, obstacles remained, such as, inadequate financial services, un-reformed land tenure and civil service systems and challenges in the power sector, that had the potential of derailing the progress made so far.
All these had in the recent past resulted in the deterioration in budget discipline and inflation.
Also affecting the economy, among others, he noted, was the current downturn in the world economy and the exclusion of Northern Ghana, which he said were being tackled.
Mr Killick was optimistic that despite the challenges there was room for improving and realising levels of technological advancement and productivities in the country, particularly in the agricultural and industrial sectors.
“At the end, much will depend on the quality of national leadership and on how political systems develop,” since political systems impinged on economic performance.
He said the “patronage-driven” political system that characterised the country’s politics, was profoundly anti-developmental, emphasising short-term appropriation ad distribution of resources by the state rather than growth and wealth creation.
If allowed to persist, Mr Killick warned, it would produce characteristic policy biases with weak incentives for reform and strong incentives for wasteful spending by the overseers of the public purse.
He said civil society demands for accountability, transparency and participation would ensure the weakening of patronage politics in the country.
Mr Killick was honoured after the lecture by the Department with a medal and a citation.
DAILY GRAPHIC, FRIDAY, OCTOBER 24, 2008, PG 33