Home Business Seth Terkper writes: ‘Postponing the fiscal pain’ – Pt 1

Seth Terkper writes: ‘Postponing the fiscal pain’ – Pt 1

98
0





Fiscal offsets or consolidation?

Portion 1: Postponing THE FISCAL Discomfort

Introduction

Ghana is praised for obtaining rapidly decreases in budget deficit considering that FY2016 when the previous governing administration was alleged to have bequeathed GH¢7 billion arrears. As we argued in past articles or blog posts, the decreases are from fiscal ‘offsets’, not true payments, of arrears. The reduction of end-2016 deficit of 10.3 for every cent of GDP with an ‘offset’ of GH¢5 billion (3.3 for every cent) in the exact 2017 budget is now exhibiting in several inconsistencies.

We have said that the compilation of the GH¢7 billion (or GH¢5 billion arrears) falls outdoors the usual definition of arrears and is a daring attempt by the President Mahama administration to go Ghana to a semi-accrual accounting regime.

Logically, the accelerated deficit reduction should guide to fewer borrowing, not increase, in the rate of progress of the debt stock (debt-to-GDP ratio). Alternatively, as Figure 1 demonstrates, the decline in the price at which Ghana is borrowing has turned optimistic yet again, as it activities a climbing credit card debt load. It has acknowledged the profits shortfalls, substantial expenditures, and not long ago revealed large amounts of arrears.

Simply click this url the read the complete report.

 





Supply url

LEAVE A REPLY

Please enter your comment!
Please enter your name here