Government is borrowing to death – Dr. Amoah

Renowned economist and businessman, Dr. Kofi Amoah, has berated the government for its unconscionable taste for borrowing.

Speaking in a TV3 interview monitored by GhanaWeb, Dr. Amoah said that the government borrows money for practically everything it does and that it is approaching the point when it might not be able to pay back its debts.

To

Read full articleprevent the collapse of Ghana's economy, he continued, the government must stop borrowing money just to finance infrastructure projects and ongoing expenses and instead concentrate on taking steps to increase domestic production.

“You can’t have a nation that is characterized by joblessness, heavy importation (and excessive) borrowing. Borrowing to go and do a flyover, a flyover that will not produce any return. You may say that it eases traffic and all of that but we are saddled with these legacy debts – when I come what I did and all of that and that is pushing us to the doldrum.

“We need to the things that all countries that have succeeded do to become strong and that is on the supply side – to produce. Get the people engaged and working, producing for your domestic economy and producing for exports. And that is when your currency will be strong, your people will become taxpayers, government will have tax revenue to service its infrastructure investments.

“But if you have to constantly go and borrow to build a hospital for the people, go and borrow to do a road for the people, go and borrow to build a school, go and borrow to pay for Free SHS, go and borrow to feed the young people (school feeding), you are borrowing, borrowing to death. And that is what we are doing, we need to change that,” he said.

Dr. Amoah made these remarks on the back of S&P, an American credit rating agency, pushing Ghana's credit worthiness further into speculative territory, lowering its foreign and local currency sovereign ratings to CCC+/C from B-/B.

According to a report by marketwatch.com, S&P said its outlook for the country remains negative, "reflecting Ghana's limited commercial financing options, and constrained external and fiscal buffers."

The CCC+/C rating implies that Ghana is considered a "junk" country in terms of investment, and any investor who buys a bond issued by the Government of Ghana is at a high risk of not getting their investment.



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