Former Finance Minister Seth Terkper is warning government to put in fiscal measures that will create buffers for its high expenditures programmes.
According to him, fiscal sustainability currently hinges on discovering more oil field to create revenue to support government flagship programmes such as the Free SHS, and one constituency, one million dollars programme, among others.
Speaking to some journalists in Accra, Mr. Terkper warned government to learn from the shocks that hit the country after Single Spine was implemented.
“Frankly, Ghana had buffers in HIPC, debt to GDP fell from about 162 percent to 28 percent but we blew it. Hopefully with that experience, we will say never again. A lot depends on policies. I worry about fiscal sustainability most. We did Single Spine and it hit the economy very hard, and that was just 600,000 of civil servants. The top who earned most were just the military brass, top civil servants and the rest, and yet we know what it did to the wage bill, so when you talk about free SHS and all those things, the bill is going to be big”.
The former finance Minister under the erstwhile John Mahama administration was of the view that measures must be put in place to support other productive sectors of the economy from being starve off resources.
“I’m not saying education is not productive, education is productive but it is at the long distinction end. We have to make a fiscal decision whether we divert additional resources to cater for that or productive resources. It is a fiscal management issue,” he stressed.
Mr. Terkper however pointed out that there is hope if government is able to discover more oil fields and use the proceeds for the projects.
“Some estimates are that we could do 300,000 to 350,000 barrels on the Hess discovery. If we do that we could have a buffer,” he said adding that a lot needs to be done to sustain the programmes being embarked upon by government.