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The best way the govt can reduce the overreliance on loans and also reduce the general public sector debt is to extend domestic revenue mobilization, Director of the Institute of Social, Statistical and Economic Research (ISSER) of the University of Ghana, Professor Peter Quartey, has said.
He has therefore welcomed efforts by Ghana Revenue Authority (GRA) to used digitstastion to extend domestic revenue collection.
Prof Quartey was cautiously optimistic that Ghana are going to be ready to reduce its debt within the next two to 3 years due to the measures introduced by the GRA.
He explained on the Business Focus Programme on TV3 Monday April 19 that this is often thanks to the measures introduced by the Ghana Revenue Authority (GRA) to maximise domestic revenue mobilization.
“I believe if we are ready to raise more revenue domestically then we will then we will reduce our dependence on loans,” he said while speaking on the debt situation within the country on the Business specialise in TV3 Monday April 19.
He told host Alfred Ocansey that “At the instant our revenue to GDP ratio is below the edge . Unless we show commitment to reinforce our revenue generation we’ll still be during this quite situation.
“I have seen efforts on the a part of GRA to try to to what I call digitization to attenuate the human interface in terms of revenue generation. If we are ready to sustain that and are successful then i’m very sure that within the medium term, within the next two to 3 years, we’ll enhance our revenue generation and reduce our dependency on loans and our debt to GDP ratio will definitely come down.
“Debt to GDP may be a combination of two factors, total debt stock and also as gross domestic product. If we grow our GDP, the projection is that we are getting to grow by 5 per cent. If we are ready to do this also as continually reduce our debt levels GDP ratio is probably going to return down.
“So, i’m cautiously optimistic that we’d be ready to reduce our debt to GDP ratio within the next two to 3 years.”
The 2021 budget statement presented to parliament by leader of state business Osei Kyei-Mensah-Bonsu said the entire debt rose from 122billion in 2019 to 291.6billion as at the top of December 2020.
Dr Lord Mensah, a senior lecturer at the University of Ghana graduate school , has said a critical appraisal of the budget statement for the 2021 financial year shows that Ghana’s debt situation has gone beyond the 76 per cent to record 85 per cent of Gross Domestic Product (GDP).
Speaking on the Key Points on TV3 Saturday March 27 in reference to the vetting of Finance Minister-designate Ken Ofori Atta, Dr Lord Mensah said “If you undergo the interest payment that we are alleged to have , the financing gap we’ve created out of the budget is about 41billion and over which we are getting to finance then within the same budget it had been stated that our debt stock was around 240 plus billion.
“If you set of these together then you relate it to our GDP which is about 440plus billion , you’ll realize that we are heading towards about 85 per cent for quite the 76 per cent that has been put out.
“If you check out the budget we are hitting around 85 per cent. If you check out the recent statement that came from the planet Bank they’re projecting our debt by 2023 to be about 81 per cent of our GDP. i used to be unsurprised .”
“If you underreport and within the end you switch around and tell them to pay something it’ll be difficult to elucidate that to them.
“So, reporting and fully reporting discourse is extremely important. When it involves public service there’s nothing like mandatory disclosure then disclosure that you simply can hold on. For me, the more information you give bent the general public the higher it’s for them to know you once you are going out together with your fiscal policies by introducing taxes. i feel we should always better in reporting.
“But I understand where the minister of finance is coming from because , these are information that when it get out there people are going to be saying even our debt level is now 80 to 85 per cent but implicitly if you’re taking the budget critically and you analyze , you’ll realize that the debt that we’ve in there needless to say by end of the year is even quite 85 per cent of our GDP.”