General News of Wednesday, 21 September 2016
Despite an unwavering rise in public debt and government’s difficulty to meet key statutory financial obligations, the Finance Minister has dispelled a widely held view that the economy is broke.
Seth Terkper insists government’s tax revenue mobilization is progressing, suggesting that government’s borrowing spree is temporary.
“The economy is not broke. We are even in an era where the Bank of Ghana is not financing government, it has never happened,” he said.
There were renewed fears of a severely cash strapped economy after Bank of Ghana’s summary of Economic and Financial Data revealed last week that the country’s total public debt has hit almost GH¢110 billion as at July this year. ?
Prior to the Bank of Ghana’s revelation on September 18, there were claims by Minority Members of Parliament that cheques issued by the Common Fund Secretariat to pay some suppliers have not cleared.
However, speaking on Joy FM’s Super Morning Show on Wednesday, September 21, 2016 the Minster said the economy may be challenged but not broke.
“Looking at the tax revenue, we are mobilizing. GRA – Ghana Revenue Authority – is doing significant work,” he told show host Nhyira Addo.
The Minister also explained that risks in the economy, characterised by fiscal deficits cannot be pinned down on poor economic management.
Currently, the fiscal deficit of GDP stands a little above 5%.
“We must also understand that it is not something to do with Ghana only. We know, for example that China was growing at a very, very fast pace but it has slowed over the last 4 or 5 years,” he said.
He adds that the economies of Brazil, South Africa and Nigeria have all suffered from external shocks, reiterating his point that drops in revenues from Ghana’s exports is inevitable.
“I am mentioning these countries because these are the BRICs – emerging countries with propelled global growth. So when you look at these countries then you can also explain partly what is happening to us domestically,” he said.
He however said government was committed to implementing home-grown policies under the three-year IMF programme in a bid to restore macro-economic stability shore up its depleting coffers.