We are not against borrowing but it must be invested well – Dr Abakah

Dr Alex Annan Abakah, the President of Think Progress Ghana has stated that the organization [Think Progress Ghana and PFM Tax Africa] are not against government seeking for funds and loans to curb the challenges the country’s economy is currently facing.

“We [Think Progress Ghana and PFM Tax Africa] are not against borrowing but it must be invested well to boost future economic growth and consumption,” he said.

In an opening remark at a dialogue on the theme “Mid-Year review and prospects for a fast-track IMF program” held on Zoom on Wednesday June 27, 2022, Dr Abakah said that the country’s current economic crisis is actually self-inflicted due to mismanagement and corruption.

“This current economic crisis is actually self-inflicted due to mismanagement and corruption…let me give you some few facts here expenditure did not decrease much and so physical deficit as of today stands at Ghc38.9billion cedis, and this is more than what he projected when he presented the 2022 budget statement somewhere last year.

“…So, you looking at the public debt to GDP at 76.6% as at the end of 2021. Largely I think this cannot be true and it is obviously missing some value. So, for example if we should include state-owned enterprise loans of the government then clearly, we should see that public debt to GDP ratio should be more than 76.7%,” he said.

He furthers stated that there is exchange rate risk and this is likely to affect the GDP and this resulted in the decrease in interest payment.

“…this tells us that using the public debt to GDP ratio as a measure of debt sustainability is not the wisest thing to do, so what I think should be used is external debt to export ratio. Using this ratio will tell us the true state of the crisis that we face today.” He noted.

Source: PFM Tax Africa/ Amos Ekow Coffie