![](\"http:\/\/www.ghanamma.com\/wp-content\/uploads\/2022\/08\/Dr-John-Kwabena-Kwakye.jpg\")
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The Institute of Economic Affairs (IEA) has welcomed Bank of Ghana\u2019s (BoG) endorsement of its proposal to cap government borrowing to help rein in the public debt.<\/p>\n
According to the IEA, the Governor of the BoG, Dr. Ernest Addison as part of his press briefing on 6th<\/sup> October, 2022 reported by the B&FT said that he \u201csupports discussions on capping borrowing\u201d.<\/p>\n The institute argued that the endorsement couldn\u2019t have come at a better time after the World Bank released a report stating that Ghana\u2019s debt-to-GDP ratio could hit 104.6 percent by the end of the year.<\/p>\n \u201cAs the B&FT correctly reported, the IEA first made the call for the imposition by Parliament of a cap on borrowing (or debt) in the Institute\u2019s Comments on the 2022 Budget in November 2021\u201d the IEA said in a statement.<\/p>\n \u201cThe cap, the IEA suggested, could be incorporated into the Parliamentary Appropriations Act, which approves Government\u2019s annual total spending, or introduced as a rule in the Fiscal Responsibility Act in addition to the deficit rule\u201d.<\/p>\n The IEA said in making this proposal, it expressed concern that the borrowing implied by budget deficits seem to be invariably breached with impunity.<\/p>\n \u201cThus, it was necessary to tie the hands of the Finance Minister and insist that, any additional borrowing by him beyond the budget estimates or the new ceiling should be subject to the approval of Parliament just as pertains in the United States. This is the only way to rein in our debt and keep it at a sustainable level on a durable basis so as to avoid the debt service, which currently absorbs over 40 percent of tax revenue, from overwhelming the budget\u201d.<\/p>\n Since first making the suggestion in November 2021, the IEA has repeated the call in various subsequent communications.<\/p>\n \u201cThe Institute wishes it to be further known that, as part of the CSO Economic Governance Platform, it has made this suggestion available for consideration by the IMF Team currently negotiating a possible financial programme with the Ghanaian authorities\u201d.<\/p>\n In that submission, the IEA also called for strict enforcement of both the ceiling of 5 percent of GDP on the fiscal deficit as well the ceiling of 5 percent of the previous year\u2019s revenue on Bank of Ghana\u2019s lending to Government, both of which have debt implications.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":" The Institute of Economic Affairs (IEA) has welcomed Bank of Ghana\u2019s (BoG) endorsement of its proposal to cap government borrowing to help rein in the public debt. According to the IEA, the Governor of the BoG, Dr. Ernest Addison as part of his press briefing on 6th October, 2022 reported by the B&FT said that […]<\/p>\n","protected":false},"author":1,"featured_media":1180638,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[72],"tags":[2823,3542,13006,8206,1090,3577,9731,3137],"class_list":["post-1221729","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-borrowing","tag-cap","tag-endorsement","tag-government","tag-iea","tag-proposal","tag-welcomes"],"_links":{"self":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts\/1221729","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/comments?post=1221729"}],"version-history":[{"count":0,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts\/1221729\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/media?parent=1221729"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/categories?post=1221729"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/tags?post=1221729"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}