Our economy will possibly go into recession – Banking Consultant
A Banking Consultant, Dr. Richmond Atuahene, has expressed fears that the country’s economy may be heading into recession in 2023.
Speaking on JoyNews’ AM Show, on Friday, he explained that his conviction is based on the impact of the impending debt restructuring on the banking sector.
The banking consultant said people talk without seriously taking into consideration the debt restructuring process. He said the process itself is capable of exacerbating existing economic challenges.
“We’re not going to have it easy. It’s going to be very difficult because everybody is talking, but they haven’t taken into consideration the debt-restructuring process. That itself can affect the economy so much that we will possibly go into recession,” he said.
Dr Atuahene indicated that it takes quite a long period of time for countries to recover from a period of recession. He said the possible time span within which the economy could recover would be after two to three years given the prevailing challenges.
He said measures such as; debt-reduction, debt-profile, debt-restructuring, debt-rescheduling and debt-swap as cited in the 2023 budget, inhibit cash flow.
According to him, banks and businesses depend on cash flows.
He said the aforementioned measures will affect banks and their capital base.
Meanwhile, Prof. Charles Ackah who was also on the show, said that people should not be “unnecessarily alarmed.”
Prof. Ackah is a Senior research fellow at the Institute Of Statistical, Social and Economic Research (ISSER) of the University of Ghana.
He said the current situation provides an avenue for the country to do things differently.
According to him, the country “has come this way before” and that history “behind us can also show that other countries have also gone through this period.”
The researcher indicated that the country’s economic situation would either deteriorate or experience success depending on the kinds of policies that are employed.
Prof. Ackah said there needs to be an efficient diagnosis of the problems plaguing the economy.
Speaking on the 2023 budget, he advised that the country should limit borrowing from the international market because these countries loan out the monies expecting quick returns.
He recommended that there should be a policy that limits the activities of the Ministry of Finance while engaging in the international market with regard to borrowing. He cautioned that uncontrolled borrowing activities have led Sri Lanka and other countries in East-Asia to “their knees.”
Following the presentation of the 2023 budget, Parliament has commenced debate on its approval.
The debate commenced on the November 29 and is set to conclude on December 6, 2022.