Free water and electricity may slow economic recovery - Economist

Free water and electricity may slow economic recovery - Economist

- An economist, Dr Lord Mensah, has cautioned the government against the implementation of free water and electricity packages for Ghanaians

- He argued that it may lead to uncomfortable reactions in future

- Dr Adu Owusu Sarkodie, another economist, disagreed with him and stated that water and electricity form part of the GDP

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Dr Lord Mensah, an economist, has raised concerns about packages relating to water and electricity extended to Ghanaians.

He explained that the decision could negatively affect the work of government if care is not taken.

Dr Mensah was of the view that economic recovery may be delayed if the government is not cautious with the arrangement.

Free water and electricity may slow economic recovery - Economist
Minister of Finance, Ken Ofori-Atta Source: Bloomberg
Source: UGC

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Per a report by, he added that it is dangerous to entice Ghanaians with such packages only to halt it at a point as there would be uncomfortable reactions.

However, another economist, Dr Adu Owusu Sarkodie, argued that the subsidies implemented by the government are very practical given the current situation.

In his opinion, consumption forms part of the Gross Domestic Product (GDP) and it forms its largest component.

He added that in 2019, consumption formed 65.8% of the GDP and resources such as water, electricity, and mobile phone use all form part of consumption.

Dr Sarkodie further indicated that the government’s decision is a stimulus package and in other countries, such as the United States of America, the leaders resort to cash transfer. earlier reported that Ghanaians will enjoy three more months of free water and electricity supply.

The Finance Minister, Ken Ofori-Atta, announced this during the presentation of the mid-year budget to Parliament last month.

According to the minister, the free water will be enjoyed by all consumers and the free electricity will be enjoyed by lifeline consumers.

This will bring it to six months that the water and electricity supplies have been subsidised to help consumers cope with the economic challenges arising from the novel coronavirus.

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