According to economist Dr. Theophilus Acheampong, Ghana’s economic irresponsibility has been severely exposed by the effects of the COVID-19 pandemic and the Russia-Ukraine war.
The government has frequently said that the COVID-19 epidemic, the ongoing Russia-Ukraine conflict, and the banking sector clean-up are the main causes of the current economic headwinds.
Living standards have risen, inflation has reached record levels, and rating agencies like S&P and Fitch have downgraded the economy as a result. This has made it difficult for the government to access the global financial market.
But Dr. Theo Acheampong speaking in an interview with Accra-based Citi TV said Ghana has in the last ten years been threading on an unsustainable path in terms of economic growth.
“Our expenditure patterns kept increasing, and our gap and deficit had to be financed from external sources,” he is quoted by Citinewsroom.com.
“The point is that we have been living recklessly, over the last 10 years, our fiscal finances have been pretty much in shambles. If we recall, during the Covid-19 pandemic, we were told that those who died the most were those with underlying health conditions. In our case, what the pandemic and Ukraine war have done is to expose our fiscal diabetes,” he added.
Touching on other aspects which have resulted in the economic challenges, Dr. Acheampong said excessive borrowing and living unsustainably have further exposed Ghana to economic pressures.
“We had an underlying ailment in terms of our borrowing and living unsustainably, and these two have exposed them, resulting in where we find ourselves,” he explained.
The worsening economic situation compelled the government in July to initiate contact with International Monetary Fund for an economic support programme.
Ghana is targeting an amount of US$3 billion over three years from the Fund once an agreement on a programme is reached.
Government hopes to complete negotiations by end of this year to receive the funds in the first quarter of 2023.