Accra: Mr. David Ofosu-Dorte, a legal practitioner and economic consultant, has urged Ghana to consider creating multiple sovereign wealth funds from its pool of resources to provide necessary buffers against economic shocks that can lead to disruptions. He highlighted the potential benefits of having a sovereign wealth fund dedicated to cocoa, given Ghana's status as the second-highest global producer of the commodity.
According to Ghana News Agency, Mr. Ofosu-Dorte noted that while the uncapping of statutory funds was not a detrimental policy, better management could ensure excess funds are redirected towards building economic buffers for emergencies. He emphasized that a sovereign wealth fund for cocoa could help withstand shocks related to price pressures or fluctuations in the global cocoa market.
Speaking at a Joy Business forum on 'Ghana at Risks: the economic fallout of distant conflicts,' Mr. Ofosu-Dorte emphasized the importance of long-term planning for economic resilience. He urged against prioritizing short-term policies over long-term national goals, cautioning that election spending and party objectives often take precedence over sustainable economic policies.
A sovereign wealth fund is a state-owned investment fund used by governments to invest surplus revenues and financial reserves. These funds are crucial for stabilizing economies, growing national wealth, and generating long-term financial returns, thereby enhancing a country's ability to withstand economic shocks.
Mr. Ofosu-Dorte criticized the tendency to prioritize political agendas over national economic targets, stressing the need for unity around policies that ensure financial stability. He warned that the focus on party politics could undermine national efforts to build economic resilience.
Professor Godfred Bokpin, an economist, also advised governments to recognize economic disruptions as the 'new normal' and incorporate this understanding into economic planning. He pointed out that since 2012, Ghana has experienced several economic shocks, including the energy crisis, financial sector clean-up, COVID-19 pandemic, Russia-Ukraine war, and the Iran-Israel war.
