Economist, Dr. Ishmael Yamson, says while the government has been emphasising the need to raise revenue as part of the country’s fiscal consolidation, it has failed to cut expenditure.
According to him, while Ghana’s revenue generation continues to increase year after year, the country’s expenditure burden has continued to outpace revenue significantly contributing to huge budget deficits.
He noted that should the cycle of budget deficits not be broken, issues of debt distress will be commonplace in Ghana’s economic future.
Speaking on PM Express Business Edition, Dr. Yamson said, “We have placed emphasis on raising revenue; I haven’t heard emphatically from government what exactly they’re going to do to cut expenditure from which areas and by how much.
“We know that our problem has been that all over these years we have spent more than we have raised by way of revenue. People always tell us ‘o but Ghana is not raising enough revenue.’ The GRA revenue figure will show you that they have been growing around 17% over the last five years per annum.
“So if we are still in a crisis then it means that the bigger issue is the expenditure that government undertakes. Because if you look at the graph – we did it three days ago – since 1992, we’ve never run a balanced budget, not even to say that a balanced with a surplus. So it means that we have consistently spent more than the revenue we raise, and why? I can give you a 100 reasons why.”
According to him, the failure of the government to efficiently cut expenditure may sabotage the ongoing IMF programme.
“That’s why I say the World Bank will be robust and the Fund will be robust, all these guys will be robust and hope that the government will do what they promised that they’re going to do. But until I see it happening, I don’t believe that by 2025 this economy will be showing any great signs of full recovery,” he said.
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