Former Finance Minister under erstwhile PNDC and NDC governments of Jerry John Rawlings, Prof. Kwesi Botchwey, has said that the dreaded economic crisis that has been in the headlines is not looming, but is already onto Ghana.
At a public lecture organised by the Department of Economics, University of Ghana, in collaboration with the One Ghana Movement, a civil society organization, Dr. Botchwey warned that if urgent measures are not taken, the crisis could lead to catastrophe.
“The crisis is here and if it is not resolved, it will lead to a catastrophe.” He said.
Prof. Botchwey, is Ghana’s longest-serving Finance Minister, having served as Finance Secretary in the Military led Provisional National Defence Council (PNDC) era as well as the Finance Minister during the National Democratic Congress civilian rule, under late Jerry John Rawlings.
The lecture was delivered at Legon in Accra on Monday, March 7, 2022. It was on the topic: “On the State of the nation’ economy and politics; 65 years after independence, the path to sustainable development and democratic consolidation.”
His warning follows an earlier one by Prof. Raymond Atuguba, Dean of the University of Ghana Law School who warned that if measures are not quickly taken to stabilize matters, the economic mess could provoke a coup d’etat.
But proffering solutions, Prof Botchwey warned the options available are painful. First, he said, the government has to be honest and candid with the people.
“There is no silver bullet or magic solution somewhere that will bring lasting relief without some level of pain. The real question is how we distribute this hardship in an equitable and transparent manner,” he said.
Government, he said, must take another look at its programs “The problem is much about raising more revenue as it is about streamlining our public expenditure. We must not for instance transition temporary spending incurred during the pandemic into permanent public spending,” he said.
He urged the Government to desist from collateralizing public revenue among schemes that would further “mortgage the future of the young generation.”
Meanwhile, the Government must within this period desist from issuing bonds that would mature before 2025, cautioning that doing so would plunge the country into unsustainable debt levels.
“For example, whoever’s takes the reins of government in 2025 will have to shed a whopping $1.5 billion in Eurobond principal payments within months of assuming office. If we don’t rebuild the Sinking Fund and we are unable to access international capital markets to refinance our Eurobonds, then this could mean that the next government may default in its maturing Eurobond obligations in 2025,” he said.