The Institute of Economic Affairs (IEA) in Ghana has called for the establishment of a Ministry of Economy to take charge of national planning and economic management. This proposal emphasizes the need for a more centralized and focused approach to economic planning, which the IEA believes would better coordinate the country’s economic policies and development strategies.
The IEA argues that the current fragmented approach, where various ministries and agencies handle different aspects of the economy, leads to inefficiencies and inconsistencies in policy implementation. By creating a dedicated Ministry of Economy, the IEA suggests that Ghana could have a more cohesive and strategic framework for economic growth, poverty reduction, and sustainable development.
This recommendation forms part of a comprehensive reform policy brief unveilled by the think-tank ahead of the December 2024 elections. Under this proposal, the new Ministry of Economy would take charge the National Development Planning Commission (NDPC) and be responsible for preparing National Development plans. While the Ministry of Finance would focus on managing government finances in line with development strategy prepared by the Ministry of Economy. “A separate Ministry of Economy is needed in addition to the current Ministry of Finance to give due attention to economic planning and development while promoting transparency, accountability and efficiency in economic management,” it highlighted.
The proposed Ministry would likely be responsible for coordinating fiscal policy, monetary policy, and overall economic strategy, working closely with other ministries and institutions such as the Bank of Ghana. It could also play a key role in long-term planning, ensuring that economic policies are aligned with the country’s development goals.
This call from the IEA reflects growing concerns about the effectiveness of current economic management practices in Ghana, particularly in the face of challenges such as fluctuating commodity prices, exchange rate volatility, and the need for structural transformation of the economy.
On the macroeconomic front, the IEA advocates for stringent fiscal discipline. It suggests reducing the current Fiscal Rule of five percent deficit-to-Gross Domestic Product (GDP) ceiling to a tighter three, in line with ECOWAS criteria. Additionally, it proposes introducing a debt/GDP ceiling of 60 percent, deemed the sustainable level for Ghana by international standards.
With the 17th International Monetary Fund (IMF) bailout programme underway, stakes for the next administration could not be higher. Analysts believe that the incoming government will face an overwhelming task in implementing these wide-ranging reforms while navigating a complex global economic landscape.
