A former Finance Minister in the erstwhile Kufuor administration, Dr. Anthony Osei Akoto has raised fears that Ghana's economy could return to its Highly Indebted Poor Country (HIPC) status if measures are not taken to reduce the overwhelming pressure on the budget.
Dr. Akoto stated that signs are already showing as a result of the debts piled up in areas such as the road and energy sectors.
Dr. Akoto further stated that the migration of public workers onto the single spine salary structure (SSSS) has put intense pressure on the economy leading to a sharp rise in inflation.
He explained that in view of the current agitation by teachers over their demand for a 43% pay rise, government may be compelled to borrow money from external sources to support its expenditure which will further deepen the economic woes of the country.
In an interview with Adom News, the Tafo Pankrono MP cautioned government to employ stringent measures to save the economy, in order not to pile up debts that could cripple the economy.
“There is so much debt in the system which continues to pile pressure on the budget. Government still has to pay arrears of teachers and other public servants, so then government has to see the red light and act fast,” he emphasized.
Dr. Osei Akoto’s position was corroborated by an independent Economic Analyst, Dr. Joe Abbey, acknowledging that the enormous pressure on government budget could throw the economy out of gear.
Dr. Abbey who is an Executive member of the Legon Centre for Policy Analysis suggested to government to strengthen the private sector in order to curb the situation.
He said when more of the human resources are absorbed in the private sector they would not necessarily rely on government pay roll which will relieve it of some pressure.
“Apart from government investing in the private sector excess expenditure must also be reduced so that the money saved can be invested into other areas,” he added.
Story by Maame Esi Nyamekye Thompson/Francis Hinakwah/Adom News
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