Post DDE: Assurances, clear plans for fiscal stability required – Expert says
Financial Economist, Professor Lord Mensah, has called on the Ghanaian government to take bold steps to revive the economy in the wake of the country’s debt exchange.
In an interview on Wednesday, Professor Mensah highlighted the need for the government to create more fiscal space by reducing its expenditure and restoring fiscal sustainability.
He emphasized that the government must make sacrifices just like other stakeholders have done. Professor Mensah’s advice comes at a critical time when Ghana’s economy is facing significant challenges, including high debt levels and sluggish growth.
The debt exchange, which took place in early 2021, was intended to reduce Ghana’s debt burden and free up resources for investment in critical sectors of the economy. However, there are concerns about the post-debt exchange period and how the government plans to utilize the fiscal space created.
According to Professor Mensah, the government must give assurances and a clear plan on how it intends to reduce the size of government and cut down expenditure.
He urged the government to show more commitment towards stabilizing the fiscal economy post debt exchange.
“For me, my worry is the post debt exchange, the assurance that will come from the context of the government. We shouldn’t look at the bondholders alone, it’s tight in general, and my worry has always been the possible fiscal space we can create. We should take advantage of it and utilize it very well to revive the economy back to its form that will please the people,” said Professor Mensah.
The Ghanaian economy has been grappling with a number of challenges in recent years, including high levels of public debt, fiscal deficits, and low productivity.
The COVID-19 pandemic has only exacerbated these problems, with many businesses and households struggling to stay afloat.
In response to the economic challenges, the government has implemented a number of measures, including the debt exchange, as part of its efforts to stabilize the economy.
However, there is still a long way to go, and the government must take decisive action to address the underlying structural issues facing the economy.
Professor Lord Mensah’s advice highlights the need for the Ghanaian government to create more fiscal space and reduce its expenditure significantly to restore fiscal sustainability and turn around the ailing economy.
The government must take bold steps and make sacrifices to revive the economy, including reducing the size of government and cutting down expenditure.
This will require a concerted effort from all stakeholders, including the private sector, civil society, and the international community, to support the government’s efforts to stabilize the economy and promote sustainable growth and development in Ghana.
