“GHc10 Billion Cedis Will Help Bridge Budget Deficit” - Prof. Quartey
Economist, Prof. Peter Quartey says he supports the decision by country’s central bank to release GHc10 Billion to government as part of measures at bridging the budget deficit caused by the novel Corona virus pandemic.
According to him, the move when executed will help government cushion the economy from the contrary effect of the virus.
It however emerged that Governor of the Bank of Ghana, Dr. Ernest Addison was reported to have disclosed that the central bank was making 5.5 billion cedis of the total financial support.
He added that he believes government will use the money released to purchase covid-19 relief bonds to ease liquidity needed for various forms of expenditure.
"So far in the past couple of years, the central bank has provided zero financing to the government, but we are not in normal times, and I believe it is just proper for the central bank to steps in if it has surplus funds to help the government,” he noted.
Reacting to comments from the Governor of Bank of Ghana, Prof. Quartey explained it was necessary as most economies, through their finance ministers are re-prioritizing their expenditure to determine the shortfalls in revenue; both projected and actual.
He said “The support from the Bank of Ghana as set aside a memoranda of Understanding(MoU) it signed with the International Monetary Fund (IMF) not to fund government's budget deficit. Advocates of this have argued that the move presented fertile grounds for successive governments to overrun their budgets with impunity”
Professor Quartey challenged the Minister of Finance, Ken Ofori-Atta to divert majority of the money to be released to the Health and Agricultural Sectors of the economy.
"Large scale commercial agriculture I believe could be one area that the government can pick about ten farmers to support and then within the health and pharmaceutical sectors. These for me are two critical areas that the Finance Ministry can look into.” He explained
He appealed to Members of Parliament (MP) to evaluate parts of the Public Financial Management Act to cater for the misrepresentation to certain limits such as the budget deficit which is sits at 5% of GDP for any given year.
“Parliament would have to look at the limit and set new ones which will be acceptable. Yes, we all agree we are not in normal times, but then it doesn’t mean we just need to spend. That has to be done within acceptable limits,” Prof. Quartey added.
Thinknewsonline.com is learning the GHc4.5 Billion which is to be released by the Bank of Ghana will be released in the course of time as the controller monitors progress in the country’s economy.
Story by: Magdalene Maame Abena Serwaa Asante