Don’t borrow for consumption – Kofi Amoah advises gov’t

Ghanaian business mogul, Dr Kofi Amoah believes the government must not keep on borrowing to offer freebies to the Ghanaian people.

He believes the government’s plan to construct schools and hospitals in the country is sound but insists the government must change its funding approach.

“Don’t borrow for consumption. We are now talking about building hospitals and clinics in the country. No one is speaking against the building of hospitals and schools to support education but we have to change our thinking. It is not about providing goods and services as freebies to citizens. We have to possess the capacity to pay for these freebies,” he stated.

According to him, the government can borrow alright to construct these hospitals and schools but if unemployment is high and the few employed also receive low salaries, then these facilities cannot be continuously sustained.

In an interview with Don Kwabena Prah on the Epa Hoa Daben political talk show, Dr. Kofi Amoah stated, “If we still face the problem of unemployment and underemployment, then any new hospital built will become a drag on gov’t budget. We may be looking at the benefits of building hospitals alright but we are going to keep borrowing to keep them going.”

He believes the better option is for government to focus on job creation. The businessman posits that with the people having jobs and earning incomes, “they become taxpayers and the tax revenue can provide schools and hospitals for them. You cannot keep borrowing to give the people things.”

With the belief that the people can be the engine for their own transformation, he added, “It is through the jobs created that they can buy cars, build houses and pay fees. That must be the intellectual and psychological mindset for a nation to become successful.”

Ghana may have no option than to return to the International Monetary Fund (IMF) for financial support if its debt continues to rise.

The debt, which is presently a little above ¢335 billion, continues to surge and create problems for the economy.

According to a Bloomberg survey, the country may have to pay a higher premium if it returns to the international capital market next year to issue a Eurobond.

Ghana’s credit-risk premium soared to the highest since the start of the Covid-19 pandemic ahead of next month’s budget.