Government has been urged to look for cheaper sources of financing to borrow in order to slow down the rising country’s debt.

Again, it had been advised to slash tax exemptions given to some multination companies.

The nation’s debt remained relatively unchanged at 393 billion in the first half of this year, but that will change in the 3rd quarter because of the $750 million commercial loan approved by Parliament last week.

Speaking to Joy Business, Finance Lecturer at the University of Cape Coast, Seyram Kawor, said the way to go in keeping the country’s debt levels sustainable is to reduce its appetite for borrowing, whilst plugging the loopholes within the tax system.

“When you look at the debt level it remains unchanged or it is low. It’s just a situation to tell us that over the past months, Ghana has not been able to add any more debts to what we already have. The debt portfolio would increase because of the $750million loan that we have. As it stands now, it is still unsustainable if we continue to add $1 billion to the debt portfolio.”

“What we need to do is to try to look at cheaper sources of borrowing and once we get cheaper sources of borrowing, we will be able to have some amount of reduction in our debt portfolio.” The country must also try to generate internal revenue from within the country; in a sense that there are loop holes when it comes to revenue collection especially in the system where cash is the main source of payment”, he stressed.

Looking at corruption report by the Ghana Statistical Service, he added that “it still tells us that a lot of the revenue that are collected are still throughcash and for that matter we still have revenue leakages. So there's a need for us to control our revenue leakages and then those who are supposed to pay the taxes are paying the right taxes and are not avoiding the taxes over time.

Also, Economics Lecturer at the University of Ghana, Dr. Adu Owusu-Sarkodie, told Joy Business, government must be aggressive in shoring up its revenue to reduce borrowings.

“The debt level is relatively stable because government has not be able to raise any bonds [Eurobonds] and there has not been any further borrowing; in fact since the beginning of the year. Because of the downgrading [by Fitch Ratings], Ghana could not have access to the international capital market. That's why government wanted to pass the E-levy in a haste so that they could get access to the market”.

“Now they've gone to borrow $750 million, and obviously it should shoot up the debt levels. We have to multiple it by the exchange rate of 8.0 and we're talking about somewhere 7 billion or so. So that will increase the debt once the loan is passed. But most importantly is how to service the debt”, he pointed out.

“So we need more domestic revenue to service the debt”, he said, adding  “as it stands, government is unable to raise enough domestic revenue, so even financing developmental projects which are known to finance the debt level is a difficult situation”

To him Ghana is in a very distressed position, but the coming on board of the International Monetary Fund will help stabilise things.

“And going forward, the best substitute is for Ghana government to leverage on the funds that the Fund will bring to the Ghanaian economy. And also to raise enough domestic revenue; and I think there's something that the IMF will really want the government to do during the programme with them”, he added.