The Institute of Fiscal Studies (IFS) has urged the Government to resist the temptation of leveraging recently improved credit rating to launch a return to the international bond market.
According to the think tank, an early return to the market could prolong and worsen the country’s economic challenges.
Speaking at a press conference on the assessment of government’s mid-year fiscal policy review, Mr Leslie Dwight Mensah, a research fellow at IFS, said a return to the international bond market was not a sustainable solution to the revenue and financing challenges of the government.
“Resuming such borrowing will cause the already high debt level to sharply worsen, causing debt service cost to sharply increase, rapidly,” he said.
He urged the government to prioritise improving revenue mobilisation by focusing more on the extractive sector.
The call comes amid improved credit ratings from international agencies who, in the past, downgraded Ghana for its high debt level.
President John Dramani Mahama also recently hinted at a possible early return to the international bond market when he addressed heads of private sector firms at the CEO Summit in May this year.
Mr Leslie pointed out that Ghana’s fiscal prudence over the past half year was largely underpinned by weak expenditure execution due to a difficult revenue mobilisation drive and harsh financing conditions.
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Source: myjoyonline.com
