The former Minister for Finance under the erstwhile John Dramani Mahama administration, Honorable Seth Terkpe, in an interview with Ghana Web’s Ekow Coffie on Saturday morning has said that President Nana Addo Dankwa Akuffo-Addo’s economy is doing well just that he is borrowing too much and that must be seriously addressed.
According to Mr Seth Terkpe, the Nana Akuffo-Addo led government is spending heavily on consumption without a corresponding expenditure on investments. According to him, this is what necessitated the difficulty of the economy to recover from the shocks and economic depravation caused by the emergence of covid-19.
“Generally speaking, I would admit that President Nana Addo Dankwa Akuffo-Addo and his government are doing well but the rate at which they borrowed and are still borrowing is where the problem lies. This has increased the total indebtedness of the country and debt-to-GDP ratio is even more than everyone initially forecasted,” Mr Terkpe told Accra based Ghana Web’s Ekow Coffie.
According to him, natural disasters and other external factors trigger a country to borrow but stabilization of the economy is key and this could be done through saving out of the better days of the economy to cover any future crisis. This is why there is the need to save and not just spend on consumption.
“In budgeting for the economy, there is always the need to have 30 percent dedicated to current expenditure whilst the rest 70 percent should be dedicated to investment and investment related expenditure. However the current government places too much attention on consumption and that is why they are always borrowing to cover the shocks of covid-19 on the economy.”
