Financial analyst Leslie Dwight Mensah has raised concerns about the potential dangers of increased borrowing ahead of Ghana’s December 2024 elections, urging the government to exercise caution to prevent undermining the country’s delicate economic recovery.
Mr. Mensah pointed out a troubling pattern, noting that Ghana typically ramps up its borrowing by nearly 50% during election years compared to non-election periods. He emphasized that continuing this practice under the current economic conditions could have severe consequences, especially as the nation is still grappling with the aftermath of a significant financial crisis.
“If we repeat past behaviors, the outcome could be catastrophic,” Howard warned. He explained that excessive borrowing could disrupt the progress made through the International Monetary Fund (IMF) program, which has played a key role in restructuring Ghana’s debt. Failing to adhere to the program’s objectives could lead to another round of difficult economic adjustments after the elections, further burdening the country’s finances.
Despite Finance Minister Ken Ofori-Atta’s assurances that the government will avoid the typical election-year overspending, Howard remains skeptical. He noted that similar commitments have been made by every finance minister during election years since the Fourth Republic, but the real challenge lies in taking different actions when faced with political pressures.
“What’s rare is actually doing things differently,” Howard remarked, stressing the importance of vigilance and the readiness to adapt policies if the situation demands. He urged policymakers to remain aware of the risks and prioritize economic stability over political objectives.
Mr. Mensah also highlighted that decision-making in this context is not just about economics but is deeply influenced by political factors. “As decisions are made, it’s crucial to consider the current economic conditions and the broader backdrop,” he advised, emphasizing that the government must strike a balance between political goals and the need for fiscal responsibility during this critical time.
Source: Ghana/Starrfm.com.gh/103.5FM/Mary Asantewaa Buabeng
