Tuesday, January 6, 2015

Ghana in 2015: An Outlook

To an absolute certainty, 2015 will have huge implications for Ghana's political, economic and social developments for many years to come.

One scenario stands out as the most probable: A severe economic downturn.

By the middle of the year, the accretion of the systematically irrational decision making at the highest echelons of political governance over the last couple of years is expected to reach a crescendo. The worsening fiscal disequilibrium, severe balance of payment deficit, shrinking foreign reserves, huge debt repayment requirements and a depressive business environment will lead to an oppressive economic downturn.

To a large extent, the tragedy of Ghana's failure to thrive at this crucial hour of Africa's rising only illuminates the magnitude of the cripplingly bad decision  making at the centre of our political governance. As our reputation as a viable frontier economy takes a beating, foreign direct investment (FDI) is expected to dwindle significantly, wreaking havoc on our economy with severe repercussions on the already weakened cedi.

With he advent of another IMF-prescribed economic recovery programme, troubling echoes of our recent past will come knocking, tearing down further our collective pride as a nation. All in all, the cedi is expected to bleed again and inflationary pressures are likely to be on the ascendancy in 2015, weakening the hands of our national leaders in any negotiations with IMF.

Contrary to familiar presidential pronouncements, problems with electricity supply will not get better in 2015. In fact, “dumsor” will get worse, dragging down economic and social welfare across the country. Thus in 2015, Ghanaians will increasingly feel the heavy weight of the state’s administrative incompetence.

Because our political decision makers manifestly lack the kind of discipline necessary to sort out the problems they have effortlessly created, Ghanaians should expect an environment of economic haziness and a clumsy misery of confusion throughout 2015.

Alas, investors, business people and Ghanaians in general would need to temper their expectations; for Ghana will fare rather poorly in 2015.

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