He pointed out that the indicators that qualified the country into that status are no longer reflecting as they currently point to a reversion to the former status of developing economy.
The Convention People’s Party (CPP) leading member made these known on TV3’s News 360 on Friday, August 1 in an interview with Kenneth Osei Ampofo.
Dr Osafo cited that the defining base of $1,000 and above per capita income for a middle-income country can no longer be said of Ghana as its per capita income has dropped to $600.
“The Gross Domestic Product has also devalued in a way,” he mentioned, indicating that the amount of $50 billion as against 20 million population then has reduced to about $30 billion as against a population of 25 million.
“Definitely we have gone back to our old classification as a developing economy not a middle income economy,” he stressed.
Redenomination to blame?
Dr Osafo said the redenomination of the Cedi is partly to blame for the current crisis as the exercise propelled Ghana’s economy to the levels of developed nations prematurely.
“Making the Cedi stronger than the [US] Dollar was a fundamental flaw in economic policy management because when your currency is strong it means you are having more exports than imports and there was nothing like that at that time.”
He said with such a strong local currency then, Ghana was considered “well-placed’ in terms of infrastructure to match any other of a middle-income country in the world.
“So, it didn’t help.”
Government has admitted the country’s middle-income status has compounded the economic challenges since the country does not benefit from aids any more.
President John Dramani Mahama has, however, assured the nation that by December, there will be an improvement in the cost of living.