Vice-President Mahamudu Bawumia has said the world economic order has undergone massive change in recent years and Africa, especially Ghana, needs to take bold, difficult but firm decisions in order to face the economic headwinds buffeting the world.
Speaking at the two-day Standard Chartered Bank Digital Banking, Innovation and Fintech Festival in Accra on Wednesday, Bawumia said the combined effects of COVID, the Russia-Ukraine conflict and major disruptions in global supply chains had brought untold economic damage across the world, and requires new thinking and positioning, especially as the world eases into the Fourth Industrial revolution.
“In Ghana, for example, if you look at between and 2019 and today we’ve seen about a fivefold increase in the rate of inflation. Go to next door Togo, we’ve seen about a 16 fold increase in the rate of inflation, Cote d’Ivoire has seen about a sevenfold increase in the rate of inflation, and the UK has seen an eightfold increase in the rate of inflation,” he said.
“And this has also been accompanied by a very strong dollar which has seen currencies really fall in value. Yesterday I was told that the Chinese Yuan is at its lowest level since 2007. The new British Prime Minister, Rishi Sunak, was basically described the UK’s economic situation as a profound economic crisis.”
“So what we are seeing globally, of course, with the disruption of global supply chains, post COVID, is a major change in what was the status quo before COVID. The global economy as we know it, as it existed, pre-COVID today does not really exist anymore. Emerging market access to the capital markets has been very restricted and may continue to be restricted for the foreseeable future. And more and more we are seeing economies rethinking economic strategies. But there is a clear move towards more self-reliance in economic policy,” Bawumia added.
“And at the same time this global economic environment is transitioning into the Fourth Industrial Revolution where the digital economy is taking center stage. So as we try to deal with the economic crisis globally, economies also have to re-position themselves to partake in the Fourth Industrial Revolution,” he noted.
Commenting on the recent turmoil in the Ghanaian economy, Vice President Bawumia said Government was considering a number of measures to tackle the challenges and ensure fiscal discipline. President Akufo-Addo would be addressing the nation in the coming days on such measures, he said.
“In Ghana specifically, we are dealing with an economic crisis that we have to address in different dimensions. The first and most important, which affects the confidence that we have in the economic system, is to make sure that we have fiscal and debt sustainability. This has been one of the areas where we are having discussions and negotiations with the International Monetary Fund about restoring fiscal and debt sustainability.
“No doubt it is not going to be easy. It will require very bold, difficult, but firm decisions. And I think these are part of the discussions that we’re having with the IMF. And I’m sure once those are concluded, it will be clear that it will not be and it should not be business-as-usual because we have to adjust to the new global and domestic realities,” he added.
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