Banking consultant and economist Prince Obiri Yeboah has urged the government to exercise caution in its spending during the upcoming election year.
Overspending and increasing debt in 2024 could negatively impact the economy and potentially destroy the progress made thus far, he said.
The economist noted that excessive budget overruns during election years could derail economic gains under an International Monetary Fund programme this year.
He explained that there was a need to maintain financial discipline, and prioritising expenditure in 2024 will be crucial to the economic recovery of the country.
“Any decision by the government to embark on excessive spending could force the government to spend beyond its budget and this will create problems in the long term.”
Speaking on Nyankonton Mu Nsem on Rainbow Radio on Rainbow Radio 87.5FM, he said “once again, we are in an election year. If you are observant, you will realise that when the first tranche came, there was a by-election; the government should use the third tranche for productive ventures. We should use the money in a manner that will generate returns. I have already told you that the cedi depreciation is caused by multiple factors.
The major one is that whenever we go in for loans to execute projects, we don’t execute these projects well, so they don’t last, and in less than two years, the projects deteriorate, and we go back for more loans to repair them. An example is how we construct our roads. We go in for loans to construct asphalt roads, which do not last, and so our debt is always rising.
So the government should invest the third tranche into productive ventures. We should also know the specific activities the money will be used for. These activities should have the ability to generate returns to pay back the loans. They should not tell us the money will be used for budget support without the specific activities mentioned. The government should not overspend or release the money into the system to make it look as if the economy has fully recovered, so Ghanaians will vote for them. If we do that, in the short term, things will appear to be stable, but in the long term, we will feel the negative impact.
In 2020, the government engaged in cosmetic activities, although we were in crisis, and made it look as if the economy was stable in order to win the elections. The realities dawned on us after the general elections. That is the reason why we had to embark on the debt exchange programme and the other ‘harcut activities’. So the government should invest the money in very productive ventures that we can point our fingers to, like the University of Ghana Hospital and the Bank of Ghana Hospital. Let’s make those legacy projects so that the next generation will have something to talk about.”
By: Rainbowradioonline.com/Ghana
