The Director of the Institute of Statistical, Social and Economic Research (ISSER) of the University of Ghana, Prof Peter Quartey,has cautioned the country against excessive spending this year to avoid putting the economy out of gear.
The nation, according to him, during every election year spend beyond reasonable limit and then use the next to clean up the mess and cautioned that, if the country continue with the trajectory during this year’s elections, the effect in 2025 will be devastating.
“We have this cycle that every election year, we tend to spend beyond reasonable limits and then we use the next three years to clean up the mess and then we go back again and spend and then clean up the mess” he indicated.
Prof Quartey gave the caution at the 7thBiennial Social Science conference organized by the Faculty of Social Sciences Education of the University of Education, Winneba (UEW)
The two-day conference which was on the theme: “Bringing the gown to town: Governance, Society and Post Pandemic Adjustments”, sought to interrogate the post-pandemic adjustment from governance and societal perspectives.
Prof Quartey, indicated that, Ghanaianswould have to tighten their belts if the cycle of excessive spending was maintained in, saying, “The first quarter of 2025, you will need to tighten your belts because we are going to have some roller coaster in the first quarter of 2025”
“I hope government’s commitment to avoid this will be respected” he said.
He further said that, the COVID-19 pandemic and other external factors had increased government expenditure which had widened government deficit.
The pandemic, he said, had resulted in high public debt and that the kind of debt the country owe involve commercial loans with high interest rates that ought to be paid and that he said resulted in the country seeking a bail out from the International Monetary Fund (IMF).
the bailout, he explained, was due to the fact that, the country had borrowed beyond sustainable rate and said, right from 2014, the nation was being cautioned through the IMF reports that, “Where you are heading to, if there is any major shock, you will be hit that very high”.
The pandemic, Prof Quartey said, exposed the structure inhibitions and weaknesses in sub-Saharan African economies, saying, “There were inherent iniquities and the pandemic really exposed us”.
“We export our commodities in its raw form, we always running large budget deficits, high inflation among others that affected our growth rate”
Picture: Prof Peter Quartey, during his presentation at the 7th Biennial Social Science conference organized by the Faculty of Social Sciences Education of the University of Education, Winneba (UEW).
FROM DAVID O. YARBOI-TETTEH, WINNEBA