Speaking at the budget 2016 forum held Thursday, a former Governor of the country’s central bank, Alex Ashiagbor observed the country’s growing deficit, and its financing as well as fiscal discipline were major issues confronting the economy.

wpid-Finance-Minister-Seth-Terkper-says-the-statement-is-to-indicate-the-impact-of-OIL-PRICES-on-the-2015-budget-300x183.jpgGhana’s Finance minister will present the government’s fiscal policy and financial statement for the 2016 fiscal year to the country’s parliament on Nov. 17.

Ashiagbor, who is currently the Chairman of the Governing Council for the Institute for Fiscal Studies, a local fiscal policy think tank, emphasized sound fiscal policy was of prime concern and urged the government to pay attention to that direction.

“The issue of the growing deficit and its financing and the all-important issue of fiscal discipline must be fully addressed with candor and objectivity. These issues are basic to our economic prosperity.

“The efficient, transparent and accountable management of revenue from our natural resource endowment is an important element but sound fiscal policy must be of prime concern,” he said.

Edward Nketia-Amponsah, a senior lecturer at the department of Economics at the University of Ghana, Legon, attributed some of the fiscal challenges Ghana is confronted with lately to the country’s new trajectory of unbridled dependence on petroleum revenue for development financing.

“Oil revenue should just be a complement, rather than the main source of development financing,” the economist urged.

Ghana’s debt to Gross Domestic Product (GDP) ratio stands above 70 percent with a total debt stock of about 25 billion U.S. dollars.

This has been attributed to government’s excessive borrowing as well as the depreciation of the local cedi currency which keeps ballooning the figure when converted into the local currency.

Eric Osei Assibey, also an economist from the University of Ghana, Legon said the country’s fiscal challenges used to happen with every election year since 1993 when the country returned to multi-party democracy.

“The present economic challenges are peculiar because, unlike the previous ones which went away quickly after the elections, the present challenges have been persistent,” he said, suggesting inherent structural weaknesses be corrected. Enditem

Source: Xinhua

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