Professor Peter Quartey, Economist and Director of ISSER
• Prof. Peter Quartey has called for a balanced approach in governments’ borrowing agenda
• He believes the same approach should also be carried in lending efforts to government
• Prof. Quartey called for more lending to private sector to stimulate growth
The new governing Board of the Bank of Ghana have been urged to ensure a well balanced approach is carried out towards government’s borrowing agenda.
According to Head at the Institute of Statistical, Social, and Economic Research (ISSER), Prof. Peter Quartey, it is also necessary for the board to strike a balance in the lending efforts to government and private sector.
In an interaction with Citi Business News, Prof. Quartey explained the well balanced approach, will see to it that the private sector is not crowded out and can support key growth sectors of the economy.
“The banks certainly need to strike a good balance between lending to the private sector and lending to government. Because when you lend to the private sector, that stimulates production, employment and growth among others,” he pointed.
He added that, “On the borrowing front, instead of borrowing from the domestic front, if government borrows from international sources there are possible risks like capital flight which can have major implication on our exchange rate”
“That calls for a good balance so that you borrow from domestic sources without crowding out the private sector. I think the new board has a good role to play in all of this,” the ISSER Director said.
Meanwhile, figures released by the central bank for July 2021 on the Summary of Economic and Financial Data showed that the country’s domestic debt as a percentage of Gross Domestic Product (GDP) rose from about 31 percent to 39 percent just within 12 months.
External debt for Ghana, according to the central bank, also rose from about 35 percent to 37 percent for the period.