Amid Ghana’s economic difficulties, an economist, Dr. Theo Acheampong has advised the government to be moderate in its expenditure in order to generate more revenue to revive the economy.
He said a major reason for Ghana’s economic challenges is the government’s refusal to focus on cutting down expenditure.
Mr. Acheampong on Citi FM/TV’s The Big Issue, posited that some adjustments to the government’s expenditure will save the economy from collapse.
“Some adjustments have to be made. Either find ways of increasing your revenue or cutting back on expenditure. What we have seen in the past is the government increasing the revenue side of the equation without the commensurate cutting back of expenditure.”
Fitch, in January 2022 downgraded Ghana’s economy from B to B- with a negative outlook. Moody’s also downgraded Ghana’s economy from B3 with a negative outlook to Caa1 with a stable outlook.
The new ratings, they say, reflect Ghana’s challenges in fixing its liquidity and debt challenges.
With limited access to the international financial market, Ghana, for instance, is turning to domestic revenue mobilization to rescue the situation.
Some analysts have proposed seeking an IMF bailout as a better alternative amidst wide public disapproval for the E-levy, but the government has indicated on different platforms that it does not want to seek assistance from the IMF.
Mr Acheampong believes another measure the government can take to revive Ghana’s economy is the synchronization of the government’s policies.
“There is a big disconnect between the rhetoric and the reality. The policies that are being pursued, most of these are disconnected. You may see gains in some sectors of the economy, but they are not synchronized… There has to be a connection.”
