Member of the Finance Committee in Parliament, John Jinapor, is attributing what he feels is Ghana’s unprecedented economic mess to reckless borrowings by the current Akufo-Addo government.
He lays blame at the doors of the President, insisting that despite the global economic situation, there is nothing to show for the huge borrowings, thereby compounding the country’s economic situation.
“The [crisis] is a Nana Akufo-Addo problem. There is a problem and what we are witnessing now is unprecedented. Something must be wrong somewhere because of excessive borrowing. We are borrowing as if there is no tomorrow. Going forward, government must move away from reckless borrowing”, John Jinapor said.
Speaking on The Point of View following the President’s address on the economy last Sunday, the Yapei Kusawgu MP said government’s failure to invest in productive sectors is sinking the economy.
“Managing an economy is not only about today but the short, medium and long term. If you borrow and invest it in productive sectors, it spurs economic growth, creates jobs and generates more revenue and can deal with the headwinds”, the MP added.
Recent international ratings that saw Ghana’s economy downgraded to reflect the country’s inability to fix its liquidity and debt challenges.
With limited access to the international financial market and challenges with domestic revenue mobilization to rescue the situation, Ghana has now turned to the International Monetary Fund (IMF) for a US$ 3 billion bailout.
President Akufo-Addo has come to terms with the economic meltdown and has introduced a raft of macroeconomic and spending measures aimed at reviving the economy for at least the next three to six years as part of a framework for the country’s post-COVID-19 programme for economic growth and the IMF support.
“We are aiming to restore and sustain macroeconomic stability within the next three to six years, with a focus on ensuring debt sustainability to promote durable and inclusive growth while protecting the poor”, says the President.
Government seeks to restore and sustain debt sustainability, by reducing total public debt to GDP ratio to some 55 in present value terms by 2028, while servicing external debt pegged at not more than 18% of. annual revenue also by 2028.
In addition, the State is committed to improving the revenue collection effort, from the current tax-revenue to GDP ratio of (13%) to between 18 and 20%, to be competitive with other countries in the West Africa sub-region.