Former Finance Minister, Seth Terkper has challenged government to adopt stringent home-grown austerity measures to address the current economic challenges even as the country negotiates with the International Monetary Fund (IMF) for some $ 3 billion to shore up the economy.
He expressed disappoint the country did not build on the foundation laid by the erstwhile administration and failed to prepare in good times ahead of the current economic crisis but choose to rather do so during crisis situation.
According to him even though the current poor fiscal performance posed a major threat to the economy, there is an opportunity for the country to transition into a credible Lower-Middle Income (L-MIC) status based on streamlined petroleum production and revenue management as envisaged by the Petroleum Revenue Management Act.
The former minister emphasised that remedies to the country’s economic challenges does not lie with a short-term or a fast-track programme rather sound fiscal measures, proper accounting systems.
Ghana’s total public debt and its rate of accumulation continue to worsen-no external market access; downgrades by credit rating agencies, domestic auction failures and high costs, depletion of sinking funds remains the headwinds the country is grappling with.
Mr Seth Terkper who currently lectures at the University of Ghana Business School was speaking virtually at a Review and Compliance of the Public Financial Management Laws in Ghana forum organized by the Natural Resource Governance Institute in Accra.
He also took a swipe at the Bank of Ghana for the confusion of its independence to mean authority which had caused to it taken certain decisions without recourse to parliamentary approvals.
Mr Terkper indicated that the Budget Mid-Year Review showed that the central bank went beyond its bounds through its lending threshold intervention to the economy.
He observed that lots of levies have been reviewed or scrapped by now by the central bank but rather been increased to ten years and this causes inflation because we do not get credit for them.
The former finance minister also bemoaned a stagnant revenue supporting expansionary expenditure and arrears spending programmes, as well as compromised, non-disclosure and non-transparent fiscal accounting (offsets, arrears and bailout, energy debt and amortization as some of the drawbacks.
“These and others have implications on our stagnated tax revenue and so we need to strengthen domestic tax administration” he stated.
Other speakers at the forum include Prof Godfred Bokpin of the University of Ghana Business School who spoke on Public Debt, Fiscal Space, Priority Spending, Mr Ben Boakye of Africa Centre for Energy Policy (ACEP) who discussed Developments in the Energy Sector, Dr Steve Mnateaw of GHEITI, civil society organisations and the media.