Economist, Dr. Saed Boakye, is calling for an immediate halt in per diem to government officials and other expenditure rationalisation measures, if the country is to avoid the current happenings in Lebanon and Sri Lanka by improving the fiscal situation.
The two countries have been highly exposed to increasing debt, which has consequently led to skyrocketing of prices of goods and services, on daily basis.
Ghana’s debt is nearing ¢400 billion, a position that increases the tendency of debt default in the not too distant future, if challenges to the fiscal economy is not improve immediately.
Speaking to Joy Business, Dr. Boakye who is a Senior Fellow at the Institute of Fiscal Studies said the authorities must find immediate solution to the rising debt before it’s too late.
“In the short to medium term, the government has to critically look at its expenditure. The economy cannot continue to sustain the public expenditure pattern anymore, so the government has to take a very critically look at it and reduce waste in the system”.
To him, politicians who assume public positions and senior civil servants should drive their own vehicles so that the several millions of cedis spent to buy new vehicles is stopped immediately.
“If you go to the ministries, you will see fleets of cars – you know with drivers, maintenance costs and others. Now the country cannot continue to sustain it anymore. Get rid of all these, let’s public officials, both politicians and senior civil servants use their own private vehicles as is done in other countries.”
“Compensation has to be regularised, per diems has to be integrated to some extent and then seeking per diem from officials, through travelling, getting to hotels; all these must come to an end.”
He concluded that warning that Ghana is sitting on a time bomb as the poor fiscal situation is having a rippling effect on the monetary economy including inflation and exchange arte.
“Let me tell you, what is happening in Lebanon and Sri Lanka will soon happen to Ghana. This is because in 2018, Ghana was number three in using a greater portion of its revenue to service debt.
Ghana classified among 10 countries at risk of debt default
Ghana was classified among 10 countries globally by CFR Sovereign Risk Tracker that are at risk of debt distress.
The country scored a mark of 10, meaning it has a 50% or higher chance of defaulting in the next five years.
Presently, almost 50 percent of the country’s tax revenue is used to service debt.
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