Set up broader-based Economic Management Team - Dr Kwakye
Set up broader-based Economic Management Team - Dr Kwakye
Accra (Greater Accra), 27th January 2000
Dr John K. Kwakye, Deputy Head of the Research Department of Bank of Ghana has called for the establishment of a broad-based Economic Management Team (EMT) to ensure a sound, rapid and sustainable macro-economic growth.
The team should comprise representatives of the government, academia, policy and research institutions and civil society that "will help consensus building and acceptability of policies devoid of sectional or parochial interests."
Dr Kwakye, presenting a paper on the macroeconomics of rapid and sustainable growth at a seminar by the Institute of Statistical, Social and Economic Research (ISSER) in Accra, said to ensure adherence to fiscal and monetary policy rules and targets," it may be necessary to institute a kind of oversight role for parliament" over the Central Bank.
"Indeed, it behoves the general public to be vigilant watchdogs over the conduct of fiscal and monetary policies."
Dr Kwakye said the best means of ensuring discipline in monetary management is to strengthen the independence of the Central Bank "which will require statutory caps on the Bank's lending to government in amount and duration".
"There must be statutory provisions ensuring the freedom of the Central Bank to use its instruments for achieving price stability as a primary goal and the need for a clear separation of the monetary policy and fiscal agency roles of the Bank''.
Dr Kwakye said to reduce budgetary deficits to bearable limits in the shortest possible time, the capacity of revenue organisations must be strengthened to maximise tax collections.
Budget deficit could also be avoided through pruning expenditures to the absolute necessities to ease pressure on the budget.
A good practical way of ensuring fiscal discipline "is by instituting a cash-budget system whereby expenditures are based strictly on collected revenues".
He said the current conventional wisdom in economic policy is that growth-oriented governments should concentrate on providing an enabling macro-economic environment within which private enterprise can flourish.
"The public sector must refrain from engaging in activities where it is less efficient and which can be more efficiently performed by the private sector.
"By so doing not only do they help to reduce macroeconomics instability, but they also help directly to enhance the growth potential of the economy".
Dr Amon Nikoi, former Governor of Bank of Ghana, who chaired the function, called for massive patronage of such seminars and lectures since they provide the forum for sharing ideas.
GRi