Seth Terkper Says Current Administration Inherited Economy in Severe Fiscal Distress
Former Finance Minister and government adviser on finance, Seth Terkper, has stated that the current administration assumed office amid severe economic distress, characterised by suspended debt payments, elevated inflation and intense fiscal pressures.
Speaking on the PM Express Business Edition programme on the implications of the losses recorded by the Bank of Ghana, he argued that the magnitude of the economic challenges inherited by the government should not be overlooked.
“We inherited a situation where debt was suspended and not paid, and we risk being kicked out of the IMF program with disastrous conditions,” he said.
According to him, the government also came into office at a time when investor confidence in Ghana’s debt instruments had significantly weakened.
Mr Terkper further indicated that the broader fiscal environment was under considerable pressure at the time.
“We inherited a situation where, let’s say, the fiscal was just in a mess, where inflation was high with a huge deficit,” he noted.
His comments followed observations by the programme host that public perception at the time suggested the economy remained relatively stable.
Responding to the assertion, Mr Terkper defended the initial measures introduced by the Finance Ministry, maintaining that swift action was required to stabilise the public finances and reduce pressure on the central bank.
“You seem to be downplaying what the Minister for Finance was doing,” he stated.
He explained that one of the earliest interventions undertaken by the Finance Ministry was to strengthen control over government liquidity and cash management.
“The Minister for Finance moved in quickly to mop up loose government cash,” he said.
He maintained that the intervention helped shield the central bank from continued fiscal financing pressures.
“That prevented the Bank of Ghana, or saved the Bank of Ghana from continuing to finance government,” he added.
