Borrowing Spree: Gov’t was under the delusion of being able to repay – Financial Expert
Financial Consultant and Lead Executive Coach at Crescendo Consult Ltd, Mrs Doris Ahiati, has bemoaned the Government’s taste for borrowing with elevated spending which resulted in the country’s debt rising to unsustainable levels, for which the government had to undertake a debt restructuring programme.
Speaking during NorvanReports’ Twitter Space Conversation titled “Restructuring of Domestic Bonds, Where Do We Go from Here” on Sunday, Mrs Ahiati remarked that, Government was misguided and delusional that it could afford to continue borrowing and repay the debts.
“We were spending at a certain level that was significantly above what we could sustain, and this was on the back of the delusion that we could afford to borrow and repay it, but we have come to a point where the global markets that supported us with the borrowing have become weary and are mindful of the sustainability of the levels that our debts have accrued to and are not willing to play ball anymore,” She remarked, adding that government borrowed itself into the present economic difficulties.
Also, according to her, the re-structuring of domestic bonds is not yet over as she is of the view that Government is likely to undertake a second round of re-structuring given the resistance it faces from external creditors despite having attained an IMF programme.
“External investors are not willing to support us through the re-structuring, and so we are not out of the woods yet at all,” she said.
Already, the Government is looking to re-structure some $2.7bn pension funds held by organised labour unions.
In her view, for the country to return to debt sustainability and avoid a second round of debt restructuring, the government would have to rationalize its expenditure as not doing so will be like “plugging a deep hole with small grains,” she said.
