Every government is expected to perform some key economic roles to ensure sustainable development and improved welfare of the citizenry. Discuss the four key economic functions performed by the government of Ghana indicating how satisfactory or not (with sufficient evidence backing your stand) the current government of Ghana has performed each role.
Economic functions refer to those functions which directly impact the micro-environmental i.e. individuals, companies, government department itself, supply & demand, market, etc., and macro-environmental forces i.e. demographics, ecological, social-cultural, political, etc. forces of a country.
The 4 key functions performed by the government of Ghana are as follow:
1. Preparing fiscal policies: This is one of the major function which the government does in an economy. It relates to handles the country's expenditure and income and curating various plans to achieve fiscal efficiency in the economy. Here the government performs a function like preparing the budget for every fiscal year, making budgetary decisions, and proposing policies to reduce the fiscal deficit.
2. Preparing Monetary policies: This is the second major function which the government of Ghana performs were in consultation with the Bank of Ghana, they take money supply decisions in the economy by increasing or decreasing various interest rates in the economy which affects the purchasing power of citizens and hence affects the supply of money in the economy.
3. Economic Research and Forecasting: In this, the government of Ghana tries to research and forecast various economic outcomes well in advance to save the economy from internal as well as external shocks and thus saving the economy from going into monetary deficit. The most important function in this category is to manage the exchange rate system in the economy and keep it consistent concerning global rates.
4. Public Investment: This is one of the unique functions of the Ghana government where they do public investments into various companies by buying their stakes. The money for public investment is usually generated from government reserves with the central bank, in this case, the Bank of Ghana, or by issuing Government bonds to the general public does acting as an intermediary of transferring cash from public domain to capital formation.