Ghana: a hugely mortgaged country, with very little to show
Alex Mould writes
The true Government of Ghana (GoG) debt is hidden in the
bankrupt State Owned Enterprises (SOEs) such as; Tema Oil Refinery (TOR),
Electricity Company of Ghana and almost bankrupt SOEs (GRIDCO, VRA, BOST and a
few others). We are also gradually making the likes of Ghana Gas and GNPC not
credit worthy.
Government needs to come out clean with the true debt
exposure, and I challenge the likes of the World Bank and IMF, who seem to
scrutinise the books more when NDC is in government, to do proper analysis of government’s
debt. More important on the free cash flow that government has to meet its
ballooning debt service which has been stretched out from an average-life of
2.0years to nearly 5 years currently.
What this means is that unless government increases in revenue
and or reduce its costs, there will be very little fresh cashflow room to
create new borrowing to meet important recurring maintenance expenditure
(currently neglected, hence our bad roads and other failing infrastructure) and
new infrastructural investment in key sectors
like roads, hospitals/clinics, schools, energy, community policing, etc
It looks like, other than getting aids & grants, the
next step will be to sell important assets or increase taxes.
What they need to do like any prudent management is to
reduce costs especially the discretionary spend, curtail foolish grandiose
party-manifesto promises that don’t make economic sense especially the way they
are not thought through properly, increase efficiencies in public service and
especially in SOEs, and support growth and jobs;
Simple do what the citizens who put you in government expect
you to do: Solve the challenges, Do not create new ones
Simply let the taxpayers know you are doing the simple
things like cleaning our cities; providing good education; solving the energy
challenges - not simply by adding levies to increase utility tariffs all in the
name of ring-fenced Legacy Debt (when these very sectors SOEs are still
bleeding currently till we don’t know when).
Let’s feel and see the results ourselves - if things have
been streamlined at the ports you don’t have to tell us, the manufacturers and
importers should feel it.
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