Given the current dynamics and fiscal figures available, instead of sounding vindicated, the former Finance Minister Seth Emmanuel Terkper, has expressed the need for government to rather begin to look at austere measures going forward.
This is to enable government to get a quick stranglehold on the eminent economic quagmire staring the Nation in the face.
Mr Terkper said, far from appropriating any form of glory or plaudits to himself for predicting where the government’s spending and borrowing trajectory was going to land the economy, he can only admonish government to immediately consider or adopt pragmatic home grown solutions in order that government may avoid being forced by the change in posture of the international credit rating agencies to tie government’s apron strings to the International Monetary Fund (IMF).
Moody’s in the last couple of months have predicted that Ghana could end the year 2021 with debt to GDP ratio hitting the 80% mark which is very nearly out of the roof for any credit worthiness.
The former Finance Minister has had long standing issues with government reporting parallel figures whereby the IMF gets different set of figures as opposed to what is told to Ghanaians by the Finance Minister thereby hiding some critical exceptional costs and treating them as footnotes and appendixes which effectively doesn’t give a clearer picture of the true state and ‘health’ of the economy.
He had also been cautioning the government on the likely breach of Ghana’s sustainable debt levels and again, deficit financing by the Bank of Ghana (BoG), which largely gives one the true impression of an ailing economy. He pointed out that BoG deficit financing of government had never happened in nearly forty years.
Mr. Terkper had also always maintained that financing the deficit has got very little or nothing to do with COVID-19 spending as is being boxed together sometimes by some government communicators.
Among others, prior to COVID, debt had hit 70 percent and the budget deficit had breached 7 percent (above 4.5 percent in the 2020 budget), further at about 120 percent of tax revenue noting Ghana had been borrowing to pay part of its interest and wages.
He noted that COVID financing was fully covered by the IMF, World Bank, and other donor loans and grants.
Again, he argued that with 3 oil fields, the economy had been left vulnerable by the NPP’s non-adherence to the PRMA Act and initiatives such as the Stabilization Fund, GIIF and the Sinking Fund.
