The Member of Parliament (MP) for Bolgatanga Central, Mr Isaac Adongo, has observed that Ghana’s economy is suffering from a “crude and repulsive fiscal consolidation” that is delaying the forward march of the country and pushing the economy to the brink of a fiscal crisis.
He cited the consistent cutting of public spending to match low revenue out turns, reduction in capital expenditure in favour of consumption spending and strong appetite for debt as evidence of an economy being strangled in the name of fiscal consolidation.
He, therefore, called for urgent and credible measures to help boost spending in productive sectors, increase revenue generation and halt excessive spending in goods and services to help stimulate growth and slow down spending on non-productive sectors.
At a lecture on the economy organised by the Coalition For Restoration (CFR), the MP, who is also a member of Parliament’s Finance Committee, said the government’s current fiscal consolidation was artificial and unsustainable.
The event, which was graced by a former President and Flag bearer of the National Democratic Congress (NDC), Mr John Dramani Mahama, and other bigwigs of the NDC, sought to give the party’s version of the state of affairs on the economy.
Mr Adongo and the NDC also used the event, which was on the theme: ‘The State of the Ghanaian Economy: Myths and Truths’, to respond to the Economic Management Team’s Town Hall Meeting that was addressed by the Vice-President, Dr Mahamudu Bawumia, on April 3.
“This is worrying because by continuously cutting spending to match the historic lag in revenues, the government is delaying the forward march of our dear country through artificial and unsustainable fiscal outcomes,” Mr Adongo stated.
According to him, a good fiscal strategy must centre on mobilising adequate tax and non-tax revenue to finance critical expenditures.
This should be accompanied by investments in critical growth enhancing expenditures such as infrastructure, he said at the conference room of the Mensvic Hotel in Accra, which was filled to capacity.
“We are not just living from hand to mouth but also borrowing excessively to pay for consumption expenditure,” he said.