In light of Ghana’s economic difficulties, the Institute of Statistical, Social, and Economic Research (ISSER) at the University of Ghana has urged for a reduction in the size of government.
The Director of ISSER, Professor Peter Quartey, said on Tuesday during a forum at the institute on the 2023 budget review that fiscal consolidation—raising revenue and lowering spending, including shrinking the size of government—was necessary to build a resilient economy and restore macroeconomic stability.
To accomplish the intended result, he contends that a reduction in the size of government should be combined with an increase in the VAT and cost-cutting measures in the public sector.
Regarding the debt program, Prof. Quartey argued that reaching a national understanding among important parties would speed up the nation’s recovery efforts and assist the country avoid the blunders that caused the economy to face its current difficulties.
In order to learn from past mistakes, Prof. Quartey advised the government to deepen dialogues while the opposition engaged meaningfully.
The debt exchange program that was promised in the 2023 budget has been started by the government.
This follows the general conclusions of the debt sustainability analysis that were reached as part of the debt restructuring agreement with the International Monetary Fund (IMF).
The debt operation is a part of a comprehensive package of policies designed to, over the medium term, reduce the present value of public debt as a percentage of GDP to at least 55 percent by providing an effective ceiling on interest payments on public debt.
The debt swap program would affect all domestic bondholders, with the exception of those who hold Treasury bills, according to an announcement made on Monday by Finance Minister Ken Ofori-Atta.
Bondholders will receive 0% interest in 2023, 5% interest in 2024, and 10% interest after that. In addition, the bonds will be redeemed in 3 installments over a 10-year period.
Source: newsthemegh.com