Business News Mon, 20 Feb 2017

Ghana is broke - Joe Jackson

The Director of Operations, Dalex Finance, Mr. Joe Jackson has said that Ghana's continuing borrowing at high interest rates has rendered the country completely cash strapped.

"Ghana is broke, we don't have money. Let's call a spade a spade. Whether we embellish the status of the nation with figures or words, the reality still remains that the country is broke. If Ghana were to be a human being, it would have been in jail by now," Mr. Jackson explained.

According to him the borrowing escapade of government has hit record high and there is no way government can maneuver its budget unless it decides to scrap off earmarked funds or rigidities like the GETFUND, NHIS among others depending on its priority areas.

Although, he admitted that government need to take critical decisions to get the economy running, he ruled out the use of the heritage fund saying that it will defeat its purpose.

"We have to take hard decisions on how to run the economy of this country but we don't have to dip our hands into the heritage fund because there is a reason for it. After all, it's only little over 250 million dollars. What happens when it also finishes," Mr. Jackson added.

Mr. Jackson is calling on government not to invest the heritage fund no matter the interest it stands to accrue from it and noted that the fund is the backbone of the future of Ghana.

His comments came on the back of calls by the majority in parliament to use the heritage fund to finance the free Senior High School program despite the minority's opposition.

Discussing the use of the heritage fund among other economic related matters on State of Affairs' the Member of Parliament for Bolga Central Constituency, Hon. Isaac Adongo expressed shocked at the request by the majority regarding the use of the heritage fund.

"In fact, when l heard the news, l was shocked to the marrow. Didn't the NPP know the financial status of this country when they went on their promising spree on the campaign trail? I thought the NPP said, it has monies readily available to execute all promised projects. Why are they interested in using the heritage fund now?" Mr. Adongo questioned.

In his estimation the NPP has given Ghanaians false hopes and that they should find a way of fulfilling their manifesto promises without burdening the heritage fund.

However, a Senior Research Fellow at the Institute of Fiscal Studies has backed proposals to invest the heritage fund arguing that it's illogical to borrow at high interest rates whiles the fund is sitting on idle money.

"The heritage fund is being kept at high opportunity cost. We earn only 1% on this money sitting down while we are borrowing and paying high interest rates. The 250 million dollars heritage fund wouldn't change much should it be invested but it will better off than lying idle," He stated.

In his opinion, Ghana needs discipline to manage the heritage fund if it wants a change in its current status and said he is waiting for the Finance Minister to present the budget so he can make a determination of the direction in which the economy will be heading in the next few months ahead.

They both expressed excitement at the January 2017 inflation drop from 15.4% to 13.3% the lowest in three years and agreed that it can be sustained if government manages the fiscals which are the drivers for the dip in inflation rate.
Source: Enerst Lartey
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