- March 28, 2022
- Posted by: Charles Yeboah Nixon
- Categories: Banking and Finance, Economics, Finance, Taxation

Former Finance Minister, Seth Terkper, has attributed the challenges facing Ghana’s fiscal economy to largely lack of prudent expenditure management and not entirely revenue mobilisation.
According to him, government has not been judicious with spending, saying, government has been operating beyond its means, creating fiscal imbalances within the economy.
He cited example of the Free Senior High School (SHS) policy which he says has not been properly implemented.
“If we are going to resolve the problem we have today, we have to tackle revenue, we have to tackle expenditure. And by the way the problem is not just revenue, I listened to Professor Twumasi, there was no mention of expenditure, and let me tell you the reason why. If you look at the flagship and it’s not politically correct to talk about Free SHS, but I said in 2017 that in its current form… and again don’t say I’m hypocritical because we had progressively free secondary education.”
“But I said in its current form, there is no way even with three oil fields, we can support free SHS. And then even in the almighty USA, secondary education is free, but its day school. Students are bused to school, there are fed once a day, nobody pays for boarding. We said, let’s talk about expenditure, there is a reason am saying this”, Mr. Terkper opined.
Furthermore, Mr. Terkper said “the Heritage fund, we went through that debate, but for PIAC we were virtually using all our oil revenue to support free SHS. Then if you go back to Parliamentary documents and they are public, every single bond that we’ve issued in the last four years – and I remember the 2019 bond – up to 2.2 billion was used to support Free SHS. If that is the trend, from oil revenue to other revenue, so our problem is expenditure.
Going to IMF deepens investor confidence
The former Finance Minister also opposed views that going to the International Monetary Fund will not be the best for the country, arguing that the Fund brings credibility and enhances investor confidence.
“You don’t go to the IMF just because it provides balance of payment support. When you go to the IMF and you present a programme, the rating agencies, the equity funds and the rest who are going to refinance your debt, which you cannot pay are looking to the IMF for policy credibility.”
“By the way, it’s not because we did not have sufficient balance of payment. Yes, we will always not have sufficiency. Remember, we had the sinking fund – those were optional – there were not statutory. And then you will also need the sister institutions, which is the World Bank and the African Development Bank to give you budget support.”
He expressed surprise about the financial challenges facing the government, saying, “the entire COVID-19 loan of $1 billion, which many countries gave to their Central Banks, Ghana got a waiver from the IMF Board to apply it to the budget. And then the Special Drawing Rights (SDR) from the IMF did not only go into the balance of payment, but went into budget support. IMF has significantly even more than the World Bank has supported the budget”.