Avoid overspending in election year – Economist

Ghana’s economy risks the threat of fiscal unsustainability if government does not refrain from beginning and commissioning new projects as a means to retain power, a senior economist at the Institute of Statistical, Social and Economic Research (ISSER) and the head of the Economics Department of the University of Ghana, Professor Peter Quartey, has said.

The caution comes at a time when analysts and economists have expressed doubts about the ability of governments to ensure fiscal discipline and strict adherence to strong economic principles in election years.

Government is currently implementing home-grown and International Monetary Fund (IMF) policies to correct some major imbalances and has given several assurances that it will spend within its means.

However, speaking to Class News on the back of Moody’s B3 rating of the Ghanaian economy, Professor Quartey said government must be cautious in spending and criticised it for beginning and commissioning new projects barely three months to the December polls.

“I will caution that we try to maintain or improve upon our rating because we are in the last quarter of the year. In an election year we know what happens especially during the last quarter. Governments sometimes spend beyond what they have budgeted for so we need to be cautious in our spending. We will see the true state of the economy in 2016 towards the first quarter of 2017. That is when we will actually see what we have done and how much we have tried to maintain the deficit,” he stated.

Professor Quartey added: “Despite the ranking, government needs to be cautious and we all have to be cautious in our expectations. In the past elections that we have had, we have never been able to maintain or achieve our target, we’ve always gone beyond our target even if with or without the IMF or the World Bank we have gone beyond our target.”

In Professor Quartey’s view, to prevent over spending during the election, “Government has to tell Ghanaians the truth, the true state of the economy. You don’t have to start or do new projects in the last quarter for us to vote for you. Once we know your track record and see what you’ve been doing and we know the true state of the economy that these are your finances, you don’t want to go beyond it. I think Ghanaians are very discerning, they will vote irrespective of whether you cut sod or you start a new project.”