Ghana debt crisis was due to weakness in expenditure controls, costly borrowing and others – World Bank report
Report by Ben LARYEA
Ghana’s recent debt crisis was as a result of weak expenditure controls, inefficient, public spending, underperforming revenue collection and costly borrowing, the World Bank Group’s latest Public Finance Review report have revealed.
The report titled, “Building the Foundations for a Resilient and Equitable Fiscal Policy also highlighted the country’s impressive GDP growth of 6.8% annually from 2008 to 2019 was driven by oil production and debt accumulation which left the country vulnerable to global shocks.
The primary objectives of the report was geared towards informing Ghana’s fiscal consolidation efforts since the country activities to rebound from the 2022 macroeconomic crisis and examines domestic revenue mobilization, public expenditure efficiency and financial management, public sector wage bill and efficiency of human development agriculture spending.
At the launch of the Public Finance Review report in Accra, the Country Director for Ghana, Sierra Leone and Liberia, Mr. Robert Taliercio said Ghana needs to persist in its ambitions fiscal consolidation efforts to ensure that adjustments are both fair and sustainable.
“The report further proposed that Ghana tackles the root causes of its macro imbalance and build the foundation of a robust fiscal system to support its long – term development and however recommended four policy priority,” he said.
Mr. Robert Talliercio mentioned sustainable enhancing domestic revenue mobilization, managing the financing mix, ring – fencing pro – growth and pro – poor investments and strengthening fiscal discipline in building equitable and bust fiscal system in the medium term.
The report outlined lack of fiscal discipline and expensive fiscal response to global shocks that plunged Ghana into a full-fledged crisis in 2022 from and currently emerging as well the lack of budget discipline since 2010 resulting in borrowing public spending marked by volatility, high interest payments and mounting rigidities.
In a speech read on his behalf, the Minister of Finance, Mr. Cassiel Ato Forson, said the report will serves a valuable guide as the country navigate the challenges of macroeconomic stability and fiscal consolidation as inform long – term strategies to create a robust economy.
“It will further create a resilient economy that will support inclusive growth, forster, innovation and position the country as a regional economic leader,” he said.
