A Former Minister for Finance, Prof. Kwesi Botchwey has tasked government to live within its means if it wants to stabilize the economy.
According to him ”we [Ghana] have been living beyond our means and [we] must borrow from the domestic and external markets to finance the deficits including soverigning bond issues in capital market”.
In a lecture delivered on Tuesday at the Distinguished Speaker Series organised by the Central University College in Accra, Prof. Botchwey said Ghana cannot afford to live beyond its means because the cedi is not a strong currency to support over spending.
He said contries like the United States and Britain can get away with living above it means because their currencies are ”a good store of value”.
He noted that the consequence of government’s over-spending has led to our public indebtedness reaching the limits of our external viability.
”As a nation we must understand that borrowing from any source; whether from the financial markets, through bond issues or treasury bills does carry its own conditions…,” he said.
According to the NDC stalwart it is the interest of Ghana to cut down cost and spend within its budget.
”Borrowing from international markets thus carry its own conditions and are not markedly different from the conditions from borrowing from IMF,” he warned.
”The country can decide that we will not go to IMF for funds; we can decide that instead of medium term drawings from the IMF at lower cost, we will borrow from international markets at greater costs and short tenure and with pretty much the same conditions,” he added.
He said it does not matter which of the choices we make, when we do not have clearly spelt out policies which would convince our patners that we are able to pay for the loans we are taking then it would even be difficult for the creditors to give out the loans in the first place.
”Let us be clear, nothing comes free,” he noted.
By: Evans Effah/citifmonline.com/Ghana