Economist Professor Eric Osei-Assibey has advised the government to demonstrate fiscal discipline all the time to slow down the depreciation of the cedi, keep inflation and lending rates low.
These and other measures including diversification of the structure of the economy, Professor Osei-Assibey, believes will make the economy buoyant and consequently ease the cost of borrowing in the country.
The government has been borrowing at a high rate on the domestic market this year, due to a lack of access to the international capital market as well as inadequate revenue mobilisation.
Professor Osei-Assibey, who is also a Board Member of the Bank of Ghana, tells Joy Business government must up its game.
“To correct the high lending rates and depreciation of the cedi, we have to make sure that we diversify the economy; we change the structure of the economy”.
“We must become more competitive, export more, and make sure that our inflation levels are kept low by producing on large scale. We must also ensure that we have higher productivity and also make sure that there is fiscal discipline all the time”, he added.
According to him, if there is no fiscal discipline, the same old problems will reoccur in the economy.
“If you do all that and there’s no fiscal discipline and government continues to spend more than it generates, government will continue to borrow more and then the cost of borrowing will continually to go up”.
“The Central Bank will have no option than to increase the policy rate to anchor inflationary expectations”, he added
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