Dr. Maxwell Opoku-Afari, the first deputy governor of the Bank of Ghana delivered a public lecture organised by the University of Ghana Business School (UGBS) to climax his tenure as Corporate Executive in Residence (CEiR) at the Finance Department during the 2020/2021 academic year. The lecture took place on Thursday 2nd September 2021, at the Great Hall of the University of Ghana. Professor Nana Aba Amfo, Acting Vice-Chancellor of the University of Ghana, was the chairperson for this event.
In her remarks, the Acting Vice-Chancellor, Prof. Nana Aba Appiah Amfo applauded UGBS for their exceptional approach in leading discussions on national issues. She further expressed her appreciation to Dr. Maxwell Opoku-Afari for giving out his knowledge for the benefit of all.
Prof. Justice Bawole, the Dean of the Business School in his welcome address indicated that UGBS has formed collaborations with top industry players as well as top policymakers and faculty to bring theory into practice to improve students learning experience.
Dr. Opoku-Afari’s lecture, themed “Re-thinking Development Financing: Macroeconomic Management When the Love is Gone”, focused on three areas of macroeconomic management in Ghana. Firstly, he gave a historical overview of Ghana’s relationship with foreign entities who offer us financial aid. He then sought to throw light on Ghana’s shift from receiving donor funds to internally generated or domestic funds. Lastly, Dr. Opoku-Afari’s lecture discussed “re-thinking development financing and how domestic mobilisation can be enhanced to support the country’s infrastructural development”.
Describing Ghana’s relationship with the international community and- as he puts it- external partners, Dr. Opoku-Afari stated that during the early days of independence in Ghana and across the African continent, factors like high fiscal and current account deficits, rising inflation, slow growth and weak currencies, formed a potent cocktail that led to economic imbalances which worsened living standards, widened the inequality gap and increased poverty levels.
As a result, the international donor community decided to intervene by increasing the level of aid and other external flows into Africa, as part of their efforts to help Africa rise from the ashes of economic decline and poverty. He also opined that despite their efforts, Africa’s dire economic outlook resulted from policy inconsistencies and domestic economic mismanagement. Initiatives such as the Economic Recovery Program (ERP) and the Structural Adjustment Program (SAP) were developed and implemented by countries like Ghana to receive external financial support to “address the economic imbalances, restore macroeconomic stability, and support economic growth”, said Dr. Opoku-Afari.
Ghana’s performance on the ERP positioned it in a favourable spot in the minds of the international donor community and so Ghana received substantial support from external financing sources. However, in 2006, Ghana received the status of a “Matured Stabilizer” which translated to a shift from depending on such economic reforms to a mindset of generating funds from within to build the nation. This is also in line with the President’s vision of a Ghanaian economy that has grown past its dependence on foreign aid to developing the country; Ghana Beyond Aid.
Ghana must now re-think development finance by researching, developing and implementing policies and strategies to mobilise domestic revenue to finance developmental projects and develop effective and efficient human capital for Ghana’s growing economic needs. According to the Ghana Beyond Aid Charter and Strategy Document, Ghana needs approximately US$7 billion per annum over the next 10 years to elevate the country to an upper-middle-income class country.
Dr. Opoku-Afari intimated that the first step to developing Ghana’s capacity to generate enough funds internally for development is to rationalise government spending and efficiently enhance our public spending methods. Furthermore, he proposed that some of the measures Ghana can take to internally generate enough funds for developmental projects include: raising the tax to GDP ratio, improving the efficiency in the collection of property-related tax, taxing the informal sector and mobilising royalties from natural resources.
The First Deputy Governor of the Bank of Ghana concluded his lecture by highlighting the enhancement of domestic revenue mobilisation and Ghana’s ability to attract foreign direct investments (FDIs) as Ghana’s sustainable route to developing ways to finance our developmental needs.
The event had in attendance Mrs. Emelia Agyei-Mensah, Registrar; Mrs. Elizier T. Ameyaw-Buronyah, Director, Public Affairs, UG; Directors and Deans as well as faculty, staff and students. The lecture was also graced by Dr. Ernest Addison, Governor, BoG, Board members and staff of BoG, the general public, and the media fraternity.
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