Govt Shifting Burden Of Debt And Macroeconomic Instability To Ghanaians And Private Sector – Economist

A financial economist from the University of Ghana (UG), Professor Godfred Alufar Bokpin, claims that the current administration appears to be pushing the “weight of debt and macroeconomic instability to the citizenry and the private sector.”

Domestic debt exchange programme

The goal of this initiative is to aid in restoring macroeconomic stability. There have been worries that this could result in a “haircut,” which will make things harder for Ghanaians.

When revealing detailed specifics of the programme, Finance Minister Ken Ofori-Atta stated that there would be no “haircut” and that all holders of Treasury Bills would get the entire value of their assets upon maturity. The bond principal won’t be reduced in any way. Individual bondholders won’t be impacted.

What this shows you is that the state is essentially passing the weight of the debt and macroeconomic instability on the citizenry and the private sector, Prof. Bokpin stated in an interview with Kwami Sefa Kayi on Peace FM’s morning show “Kokrokoo.” Therefore, the state and government are not doing enough, which is the source of the suffering.

“When we talk about burden sharing one would expect that leadership will lead by example and internalise the austerity to demonstrate to the market that I understand where we are and I am willing to pay that price but the 2023 budget doesn’t do enough of that . . . so in order to crawl back, the debt operation will now have to be steep,” he added.

2023 budget approved

The government’s ratification of the 2023 budget declaration, according to The Economist, is “an crucial first step.”

But in order to get us closer to a stronger economic recovery, “there will still be a need for some kind of budgetary adjustment. . . We wouldn’t have a choice at this point if we didn’t make some kind of sacrifice.

Source: Ekow Coffie