Economist and lecturer Dr. Julius Kattah has advised the government to put the loans it contracts to productive use.
He noted that one of the challenges that has caused our economic crisis is excessive borrowing, which is not productive.
The lecturer indicated that borrowing is actually not the issue, but failure to put the loans to productive use that can generate returns has been our challenge.
Dr. Kattah said that in designing policies that will require the use of loans, the government must be conscious in ensuring that we get time to service our loans.
“Borrowing is not necessarily a problem if the loans are put to productive use, which will later provide returns, and not used for unproductive policies that have the potential to worsen debt levels and send the economy on a loose end. Our debts are too much. If we are unable to reduce our debt levels, it could affect our next tranche.
The fact of the matter is that borrowing is not a major problem, but management of the borrowing is the problem. You borrow to put it into productive ventures with the potential to give you returns. You don’t borrow and use the money for productive ventures.”
Dr. Julius Kattah also advised the government to be prudent in its spending.
He said you cannot ask Ghanaians to tighten their belts and continue to overspend.
According to Dr. Kattah, some of the major challenges that caused the economic turmoil in the country leading us to the IMF were over-expenditure, fiscal indiscipline, and a lack of transparency.
The government, the largest consumer, can provide relief by cutting excessive spending, but if they continue to overspend, the economy will suffer.
By: Rainbowradioonline.com/Ghana
