Governor of the Bank of Ghana, Dr. Ernest Addison, has admitted the country’s finances are in a mess and that as a result, investors are skeptical about Ghana reversing from what looks like a one way to the financial crisis
While addressing the 2021 Annual Bankers Week Dinner of the Chartered Institute of Bankers, Dr. Addison also admitted the 2022 budget and its grandiloquent revenue projections are not believable and investors are totally skeptical.
“The recent widening of the Ghana’s sovereign bond spreads after a successful bond issue in April 2021 surprised all of us, although we were aware of investor sentiments and their assessment of Ghana’s fiscal risks as they see the fiscal deficit outturn for 2020 as unsustainable and expecting very bold and decisive measures from the government to re-anchor fiscal consolidation and stabilize debt,” Dr. Addison stated.
The central bank boss warned that Ghana’s high deficit is unsustainable and that it is worse than its peers in West Africa.
“Investors have assessed that, as compared to our peers, Ghana required a stronger fiscal rectitude to re-establish investor confidence, and did not see the mid-year budget as addressing their sentiments,” he stated.
“The markets assessment of the 2022 budget also suggests lingering doubts about the ability of the revenue measures announced to translate into a large increase in domestic revenue.”
He admitted that investors’ doubts in the government’s ability to return the economy to a sustainable path of fiscal consolidation and debt sustainability manifested throughout this year and has now been worsened by the unconvincing nature of the 2022 Budget.
Dr. Addison laments the high levels of expenditures programmed in the 2022 budget, confirming the general view that the solution to the economic crisis lies in cutting the expenditures, and not shoving the ill-conceived E-Levy and other draconian tax measures down the throats of Ghanaians.
Member of Parliament for Bolgatanga Central, Isaac Adongo, who has been sounding the knell on the economic crises that the Akufo-Addo government’s corruption and mismanagement noted that the Governor’s admission, at last, has vindicated his position.
“Well, after years of living in denials and a window-dressed economy, it is obvious that the chickens have finally come home to roost,” Adongo wrote.
Source: Harry Graphic