The whole focus of the Government?s economic policy document titled ?Economic and Financial Policies for the Medium Term? presented to the International Monetary Fund in April this year is to cut down on government spending and to increase revenue.
Even before the National Economic Forum opened, the Government had already begun implementing some of these measures like the imposition of new levies on imports, the elimination of fuel subsidies, the sharp increases in electricity and water tariffs and the increase of the value added tax (vat).
The reasons for these actions are simple; the large fiscal and current account deficits have eroded Ghana?s international reserve position and debt servicing costs are now near high risk levels.
We at the SCANDAL are saddened by the sheer arrogance, impudence, and the brazen incompetence that has brought the entire nation to where we are today. Like we have stated elsewhere in this edition, the genesis of the crisis is the deliberate and reckless over spending by the government of nearly US$4billion in the run-up to the 2012 general elections.
That was when GYEEDA, SADA, ASONGTABA, NADMO and the rest of them were made very liquid with cash and they were crisscrossing the country with lots of freebees. We spoke about these actions but they said ?YENTIE OBIAA?.
Again when all well meaning Ghanaians were crying out and pleading with the Government to slow down the rate at with which it was grabbing loans all over the place, they got an insulting response from their leaders saying; ?We Will Continue to Borrow. After all We do not Borrow to Eat or Drink But to develop the Country?
Fast forward to April 2014 and the entire country is in a mess. We have a public debt of about GHc56billion representing about 60 per cent of GDP and debt servicing has become a major headache for government. The debt servicing to revenue ratio is very alarming at this stage.
Now they are groping everywhere for solutions. Now workers must go home on forced retrenchment so Government can cut down on the wage bill. Fuel subsidies have been removed, taxes have been increased, water and electricity tariffs have gone up, financing of projects have stalled and everything seems to have come to a standstill.
Now those who said ?YENTIE OBIAA? are calling for National Forum to gather ideas for the way forward. What a pity. The worse is that they have refused to acknowledge their mistakes and surprisingly the focus now is rather on those who refused to join them at the National Forum.
As if on a self destruct mission they are calling for a bailout; that is another loan. They have even specifically asked to be allowed to once again go into the capital market to borrow yet another One Billion Dollars. With a public debt of GHc56billion where will these new loans leave Ghana?
Source: The Sandal