It's impossible to manage Ghana's economy without borrowing – Expert

General News of Saturday, April 6, 2019

Source: Myjoyonline.com

2019-04-06

When a country registers a budget deficit, it is impossible to avoid borrowing, whether the funds come from abroad or from the local market.

Godfred Bokpin, a professor of finance at the University of Ghana, who adopted it, used it to defend government borrowing.

Bokpin said the 2017 budget, "which had received parliamentary approval," exceeded the country's revenue.

"… this budget deficit is an indication of the government's borrowing requirements," he said; adding that the 2018 and 2019 budgets also have a deficit that needs to be financed.

According to him, the problem does not only concern the current administration.

On Saturday, in the newsfile of Joy FM / MultiTV, he told Samson Lardy Anyenini: "Our budget has remained minimal since independence.

With his explanation, the speaker concluded that "there is no government that can manage this economy without borrowing."

"It's impossible," he said.

Ghana's debt in 2016 amounted to 122 billion GH ¢, which increased under the Akufo-Addo Presidency to 173 billion GH ¢ in 2019.

Bokpin was reacting to the increase in nominal debt that was part of the fallout from the two economic forums organized by the government and the previous government this week.

But the speaker said that only the nominal figure had increased under the Akufo-Addo administration.

"The debt rate is down," he said, allocating part of the IMF credit that took office in 2015.

Taking more credit for the Akufo-Addo administration, Professor Bokpin said that if the cost of cleaning up the banking sector, which amounted to 12 billion GH ¢, was eliminated, " the rate of debt accumulation would fall ".

He also rejected the criticisms of the cleanup. According to him, the cost of the absence of cleaning would have been detrimental to the entire financial sector.

Bokpin reiterated earlier, in his comments, that he had compared figures from the National Democratic Congress (NDC) and the New Patriotic Party (NPP) to power, the latter having been better managers of the economy. .