DDE: Professor Lord Mensah calls for major expenditure cuts in 2023 mid-year budget review
Economist Professor Lord Mensah has called on the government of Ghana to take action in order to revive the country’s economy.
In a recent interview, Mensah urged the government to utilize the upcoming Mid-Year Review of Estimates to announce significant cuts in spending.
He emphasized that such cuts would help boost investor confidence and bring the economy back on track.
Mr Mensah is supportive of the Domestic Debt Exchange Programme (DDEP) but believes it must be implemented alongside the necessary expenditure cuts.
He has disputed the notion that it will take Ghana up to 10 years for an economic turnaround and instead argues that the government must bring all stakeholders affected by the DDEP together.
The Managing Director of the International Monetary Fund, Kristalina Georgieva, has expressed hope for Ghana’s return to the International Capital Market.
In response to Georgieva’s comments, Mensah stated that this projection is possible, but it must be backed by government’s fiscal discipline in the coming months.
Regarding the revised DDEP offer, Mensah believes that bondholders should accept it, despite opposition from the Individual Bondholders Forum.
However, he also raised concerns about the program’s implementation, stating that better information management and stakeholder engagement could have prevented the current issues.
Finally, Mensah warned of the potential negative effects on the banking sector, such as impacts on books, liquidity, and capital requirements.
However, he also believes that the program will help review the interest rate structure in the country going forward.
