The Institute of Fiscal Studies (IFS) has advised the government to, as a matter of urgency, review its social intervention policies putting a strain on the economy.
According to the Institute, the various social intervention programs are part of what has brought Ghana’s economy to where it is.
“The government’s spending has been way too much relative to the revenue. For the past 10-years there have been huge deficits that have been declared which have continued in funds build up, high credit cost combined with compensation.
“The country is at where debt swallowing us and debt servicing has become a problem and the country’s debt has become unsustainable. Since the various social intervention programs are part of what have landed us here, they are part of the problem and it should be reviewed as part of the solution,” the Senior Researcher at the Institute of Fiscal Studies, Dr. Saeed Boakye told Joshua Kodjo Mensah on Starr Today Tuesday.
He continued: “If the government wants solutions it cannot give conditions as to what will aid the fiscal consolidation process to get the country out of where you are now. Look at free SHS for insistence, the government is cash strapped it has to borrow because compensation of employees and debt service cost exceeds total revenue.”
Mr. Boakye said the government’s total revenue cannot pay for compensation of employees and debt and yet the government still has to borrow.
The Senior Researcher also questioned why the government is refusing to review the free Senior High School policy adding that it is overburdening the economy.
He said if the government does not reconsider its decisions on the free SHS Ghana’s economic consequences will be dire.
“So everything the government does again is through borrowing. Free SHS implicitly is being funded by borrowing. Somebody can afford to pay for their wards school fees but the government says keep the money in your pocket let me go and pay interest on it and pay for your wards school fees. These are not economies,” he added.
Source: Ghana/Starrfm.com.gh/103.5FM
