Finance Minister, Seth Tekper has dismissed assertions that the country is broke but has admitted however that Ghana may be at a brink of going bankrupt.
Speaking on Citi Breakfast Show on Wednesday, Seth Tekper admitted that the country was in the red. This means government is losing money and facing difficulties that could be at risk of becoming bankrupt. However, Mr. Tekper gave the assurance that despite being in the red the situation is not as bad as being presented in the media.
“Ghana is not broke. I mean we are a country that collects 15 to 16 percent of GDP as taxes, in some countries they raise just 9%, 10% particularly in developing countries.
We are also a country that receives grant with good ratings- B+ for now so we are trying to protect, we are to borrow to finance our developmental expenditure and so to say Ghana is broke I think it is over-stretching the issue,” he said.
He said “We are talking about the sustainability of a policy that was put in place which is throwing the budget out of balance. I think this is the issue. We are in red and that is factual. But is your bill in red planned or it’s unplanned? If I am in red because I know I cannot finance or complete the Accra to Kumasi road on my budget as a developing country, I go for a loan which I plan to pay over fifteen years or if we are fortunate to get from the World Bank, for over 30 years we will be able to maintain it over time, that is planned expenditure.”
Government had to contend with a wage bill which has soared over the months because of the implementation of the single spine salary structure. Economists have warned the country’s purse will be drained if government yields to demands from agitating public sector workers.
But Labour Analysts have stated that workers will not back down on their demands especially following the payment of ex-gratia to MP’s recently.
Last year, the country experienced one of its highest budget deficits in its history as it struggled to deal with overspending resulting from the rising wage bill, fuel and utility subsidies among others. Government is also yet to recover from shortfalls in revenue from corporate taxes that were expected last year.
There are reports that a similar move may be applied to utilities as well, a move which is expected to receive some widespread resistance especially from businesses and labour groups.
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