Ghana's economy heading for a crash - Dalex CEO

Details

Parent Category: Main

Category: NewsBrief

Created on Thursday, 12 February 2015 00:00

Ghana's economy heading for a crash - Dalex CEO

Chief Executive of Dalex Finance, Ken Thompson, says there are strong indications Ghana's economy is destined for dire straits in the coming months.

"We are heading for a crash...if you are doing a business that will be earning you cedis, don't take a dollar loan. It will wipe you out", he said at a lecture organised by the Chartered Institute of Marketing, Ghana (CIMG).

According to him, figures produced by the Monetary Policy Committee of the Bank of Ghana indicate unambiguously that the country is broke.

"If you earn a thousand cedis and you spend a thousand two hundred cedis you are broke. Ghana is broke," he stressed.

Mr Thompson cited figures from the bank of Ghana that showed that government revenue was GH¢17billion as against an expenditure of GH¢24billion.

"We've got to strive for operational efficiency in this country. We are very wasteful in this country. We are extremely wasteful in this country," he said.

Ghana's economic grew by 14 percent in 2011, making the local economy the fastest growing economy in the world.

Since then, the growth rate has fallen to historic lows.

This year, the economy is projected to grow at 3.9% this year, a development many say is a magnificent retrogression.

The local currency suffered historic losses in value last year; the cedi lost about 40% of its value against other foreign currencies like the US Dollar, the British Pound, the CFA Franc and the Euro.

The government is currently in talks with the International Monetary Fund (IMF) for a possible bailout and what government itself calls policy credibility.

The IMF has stressed the need for fiscal discipline because the economy has recorded huge expenditure deficits since 2008.

Mr. Thompson believes the current trend is unsustainable.

The country can not spend money it does not have and still hope to record sustainable and impressive growth.

Source: Ghana | Myjoyonline.com | George Nyavor