Rural Farmer's Reflections (20): Standing by a Governor amidst Economic Turmoil
On a typical weekend morning, I chatted about porridge prices with my mother-in-law's daughter, find myself pondering about the public outcry over government officials' emoluments. Sure, they're steep, but let's not forget about the sky-high tickets for concerts starring our beloved musicians.
They'll entertain us for a scant thirty minutes, yet pocket dollars that'd make the average Joe wince. As I scrolled through a WhatsApp thread featuring a list of public servants' emoluments, I couldn't help but shake my head, knowing the same folks grousing about wealth distribution would fork over hundreds for concert tickets.
I'm no stranger to the world of public funding, having been smitten with economics since my A-Level days. This affinity remains strong, as I constantly seek fresh insights on fiscal and monetary policies. The textbooks paint a clear picture: these policies work hand-in-hand, aiming to create a stable financial environment.
However, the reality chugs along quite differently. Politicians, with their four-year terms and sky-high expectations for re-election, distort the picture like funhouse mirrors. They prioritize electoral promises, like stadium projects, refurbishing hospitals, or the unsustainable Free SHS program, without considering the inherent costs and consequences.
The source of funding for these projects remains clouded, whilst the secretary general's office issues reports about irresponsible spending of COVID funds, or gaping holes in the national budget, built upon World Bank grants, bilateral support, and even increased taxes.
It's a catastrophic dance between the fiscal and monetary sectors, with our politicians leading a reckless waltzy of financial indiscipline. Worse, they avoid taking responsibility for the budget deficit that continues to swell, or the consequences of inflation and weakening currency that follow suit.
The governor attempts to salvage this sinking ship, raising rates in a futile attempt to rein in inflation. Yet, his efforts are hampered by the government's profligacy. Back in the day, with HIPC relief flowing in, the capital account of our national balance of payments enjoyed some relief. Now, the situation is dire, and our governor is left struggling with a budget deficit eclipsing 20%, wrestling with debt-to-GDP ratios nearing their limits, and paying off older loans.
The scene is set for yet another economic standoff between the government's fiscal policies and the governor's monetary policies. One can't help but question: where is the fiscal adjustment needed to support the governor's attempts to stabilize the economy?
As I glance back at my economic textbooks, I can't help but feel a tinge of sadness - the perfect collaboration between fiscal and monetary policies, a stable macroeconomic environment, previously a reality, now seems a distant dream.
Oh, and as for my grievance about porridge prices? That one's still holding steady. Kuro mu aye hye, indeed.
Author's Profile:An economist by day, farmer by night, and author of the textbook "Risk Management in Banking." An esteemed fellow of the Chartered Institute of Bankers, an adjunct lecturer at the National Banking College and the Chartered Institute of Bankers. You can find me online at [email protected] or reach me at 0244 324181.
- In the realm of finance, the sustainable development of the economy hinges on a blend of effective fiscal and monetary policies, as depicted in my textbook "Risk Management in Banking."
- The ongoing economic struggle between the government's fiscal policies and the governor's monetary policies has resulted in a widening budget deficit and a surging inflation rate.
- The finance sector needs a comprehensive analysis to address the general-news topic of fiscal indiscipline, particularly with regards to the government's spending patterns and the economic impact on the market.
- It's crucial for policymakers to juggle their responsibilities towards the public and the market, ensuring sustainable development while managing resources effectively to minimize concerns over wealth distribution.
- As part of my research, I will delve into the implications of financial decisions on the business world, focusing on the interplay between government policies, banking, and the economy.
- Drawing insights from the world of politics and economy, I have identified the need for a concerted effort to bridge the gap between fiscal policy, monetary policy, and overall economic sustainability in my forthcoming report.
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