Ghana is broke, provide us with a fixing plan – Seth Terpker to Ofori-Atta

Former Finance Minister Seth Terpker has called on the current finance minister Ken Ofori-Atta to come up with a plan to salvage Ghana from its debt distress status.

Mr Terpker believes that the economy is drifting towards a Highly Indebted Poor Country (HIPC) hence the need for managers of the economy to present a plan on how to fix the economy to Ghanaians.

“Our debt had crossed 70% on the old basis and we became alarmed so President Mahama gave approval for the establishment of a sinking fund. Debt is debt and there’s nothing like free lunch. When you defer debt instead of paying it through the sinking fund, the debt is still debt, he spoke on Starr FM’s morning show.

“We shouldn’t be happy about deferral of debts because the nation could go back to HIPC. We came close to 70% and we were at risk of debt distress but now we’re debt distressed,” he said.

He further explained: “I think Dr Bawumia and Ken Ofori-Atta should come to the realisation that we’re not in a pretty position. They should listen to the IMF, Moodys. It’s not about two people. They should engage Cabinet and parliament. I think what we need are a plan and program. I’ve looked at the budget and when you look at the numbers from 2021- 2024, GRA’s revenue is still flat. Government should provide a plan on our tax structure. We don’t have that”.

Economist with the University of Ghana Business School Dr Lord Mensah on the other hand has cautioned Finance Minister-designate Ken Ofori-Atta against excessive borrowing from the Eurobond market.

According to him, the finance minister should adopt a more conservative approach in dealing with matters of the economy.

He said “going forward, I’m expecting the finance minister to be conserved as much as he can. I was reading in the news today which indicates that he will explore avenues where we can raise bonds at a zero interest rate or coupon rate, what we call the ‘zero-coupon bond’.

“And trust me, our economy, looking at it at this time, I don’t know the cost of funds that we’ll incur if we decide to go and borrow in that manner.”