- September 13, 2021
- Posted by: Ato
- Category: Economics
Former Finance Minister, Seth Tekper says the present government does not have any excuse in failing to manage the Ghanaian economy well because it has better resources than the previous NDC administration did.
According to Mr. Terkper, the Akufo-Addo administration is enjoying three oil fields, compared to one in the previous administration, whilst global oil and gold prices have shot up, yet the fiscal economy is facing several challenges with high interest payments and lack of capital expenditure, among others.
Speaking at a forum in Accra, Mr. Tekper said the problem facing the nation presently is that it’s not meeting its revenue targets, and therefore must resort to borrowing to refinance part of the budget.
“The issue we have in Ghana now is that revenue is not covering expenditures,” he said. “Total revenue including grants, oil revenue and statutory funds is unable to pay for two items in the budget – compensation and interest payments. What this means practically is that we are borrowing to finish paying those items, we are borrowing to run government – all the ministries, what we call the goods and services or current expenditure.”
Continuing, he said “we are borrowing for capital expenditure and above all we are borrowing to pay arrears and previous loans contracted. And this is something that we have been indicating for a very long time and tracking.”
“If you consider that we are talking about wages and you consider that there are agitations for more wages and all that, then the situation is getting worse. If we continue to do that then it means the interest payments will also go up, we will borrow more and therefore the deficit will keep widening again, unless some drastic action is taken. This is what is facing us”, he stressed.
He therefore dismissed the argument that the previous NDC administration left a bad economy, pointing out that “so again the representation that the economy is rosy, better than us, it’s not true. Yes we had our single spine problem, problem of disruption to gas supply that led to ‘dumsor’, the global financial crisis, the drop in crude oil prices should indicate whether we did well or not.”
Ghana’s fiscal deficit is expected to remain in double digits this year because of low revenue, despite the expected expansion in the economy.