Economist, Dr. Adu Owusu Sarkodie, has advised government to be measured in its borrowing in a bid to mitigate the likely impact of the coronavirus on Ghana’s economy.
The Finance Minister, Ken Ofori-Atta, has indicated that government will resort to various measures such as the use of money from the stabilization fund as well as contingency support from the IMF and the World Bank to bridge the revenue shortfall from the pandemic.
Dr. Adu Owusu Sarkodie however believes the rising debt stock must be controlled not to reach unsustainable levels.
“What I have seen many countries do is a combination of possible avenues such as printing of new currency, resorting to their stabilization funds or borrowing. But the danger of printing and borrowing is that if it is encouraged now, governments will keep on doing it, they might keep on with it even in times where we do not need such emergency situations. That is why most economists will not advise governments on printing money and borrowing,” he remarked.
The latest Bank of Ghana report put Ghana’s public debt stock at 218 billion cedis as at the end of 2019.
This showed a growth of 25.93 percent over the 2018 debt figure of 173.1 billion cedis.
Dr. Owusu Sarkodie however says government could resort to borrowing and other measures to reduce the burden on citizens and businesses that will be adversely impacted by the pandemic.
“…But when we come to the critical point where we need to protect the lives of people and companies, then the stimulus package must come in from all angles,” he further indicated.
As at Tuesday [March 24, 2020], Ghana had recorded 53 cases of the COVID-19 with two deaths.