Mr. Ken Ofori Atta, Finance Minister has given an assurance that the Nana Addo led administration will pursue an effective debt management strategy to ensure debt sustainability.
The Minister delivering the 2017 Budget Statement hinted further that, government will also adopt global standards of risk and treasury management to ensure accountability in the use of state resources.
The country’s debt stock he explained ‘’has reached a level of about 73 percent of GDP at end-December 2016, which is in excess of the debt sustainability threshold of 70 percent. This has resulted in high debt service costs with interest payments alone taking up nearly 42 [ES1] percent of tax revenue. This, together with Compensation of Employees and Statutory Payments, is more than total domestic revenue, leaving no fiscal space for growth enhancing policies/programmes/expenditures.’’
President Nana Akuffo Addo in his first State of the Nation Address painted a gloomy picture of the economy, stating that the country’s current debt stock had ballooned to GH¢122 billion, leaving Ghana’s debt stock at 74% of GDP.
The Minister in his budget statement gave an assurance that, …’’we will work to reduce the amount of government borrowing and the resulting crowding out of the private sector. Mr. Speaker, as an example, In the 2016 budget statement, the entire allocation for the Ministries of Roads and Highways, Trade and Industry, Food and Agriculture, Water Resources, Works and Housing, Youth and Sports and Ministry of Transport amounted to a total of GHC2.2 billion. Interest payments in 2016 (GHC10.8 billion) would be nearly 5 times what was allocated to the six key ministries combined. This is how pernicious our debt stranglehold is.’’
On job creation, the Finance Minister said the budget will create the environment for more jobs to be created.
He said, ‘’the budget will set the pace for job creation and accelerated growth by empowering the private sector. To accomplish this, we will shift the focus of economic management from taxation to production.
This he concluded ‘’will reduce the cost of doing business and create a conducive climate for investment and job creation. In this regard, a number of taxes that impede growth will be reviewed, and if necessary, abolished. Government will reverse the recent low growth trend by boosting agriculture and industrial productivity.’’