The 2012 vice presidential candidate of the New Patriotic Party (NPP), Dr. Mahamudu Bawumia has described the current state of Ghana’s economy as a crises situation.
At a lecture delivered on Tuesday at the Central University College in Accra, Dr. Bawumia said:
“The government has to admit that the economy is in crisis so that it can carry the country along and get public support for the tough remedial measures it may have to take. The denial must stop. The problem will not go away by refusing to acknowledge it. There must be policy credibility to assure markets and investors that Ghana is a safe bet. In this regard, the government should resist the temptation to make new promises and commitments of expenditure for new programs when it is unable to even meet statutory expenditures. Such promises only serve to signal a lack of appreciation of the current situation and reinforce the loss of confidence in the economy.”
According to him, “Government should as a matter of policy and urgency, significantly cut down on borrowing for now. The government should anchor fiscal policy on a debt reduction target and immediately announce it. Fiscal policy currently has no effective anchor. The announced intention to borrow an additional $1billion from the capital market this year should be shelved because it would only be achieved at very high cost which would worsen the fiscal and current account situation and make Ghana’s debt unsustainable. With low net international reserves, a double digit fiscal deficit, double digit current account deficit, and double digit inflation, Ghana would have had to pay a double digit interest rate for any sovereign bond issue this year.”
Click here to download the full speech
By: Mawuli Tsikata/citifmonline.com/Ghana
Follow @MawuliTsikata