The government has been urged to focus on homegrown policies to revive the economy post-COVID.
Mr Seth Terkper, former Finance Minister who made the call said this if not done the government might have no choice but to return to the International Monetary Fund (IMF).
Speaking in an interview on Starr FM, an Accra based FM station on Tuesday, he said the government must not project higher growth figures to help it put together a realistic budget.
“If we don’t want to go back to the IMF, then we have to start looking at a homegrown policy. What we have to do is not project higher growth figures and that will help us do a realistic budget. If the advanced economies begin to recover, their growth will increase the commodity they buy from us and that will also help us grow,” he said.
Mr Terkper’s comments come after credit rating agency Moody’s projected in its 2021 Sub-Saharan African (SSA) Outlook report that Ghana’s debt to GDP ratio will hit 80 per cent in 2021.
The debt to GDP has already crossed the 70 per cent threshold.
Moody’s said “We expect most SSA sovereigns to see their debt burdens rise further in 2021. The average debt burden in the region will hover around 64 per cent of GDP in the near to medium term compared to the 47 per cent average in 2015-19.”
“We do not expect debt burdens to come down in the foreseeable future as revenue generation capacity remains weak,” it added.
It further indicated that the country would be ranked second in Sub Saharan Africa with the greatest External Vulnerability Stress pressures.
“In SSA, higher external vulnerability indicators – which are a measure of short-term debt and upcoming external debt maturities against international reserves – will be more challenging for sovereigns outside of monetary unions. Zambia and Ghana will see the greatest EVI pressures, with 2021 levels forecast to be 509% in Zambia and 143% in Ghana.”
Mr Terkper added that the government must pay attention to the warning by Moody’s because it is a credible rating agency.
“Last year, the sovereign bond that we issued, we used GH¢2.2bn to support free SHS and that’s borrowing… Moody’s is more candid with us and I think we should be listening to Moody’s and Fitch.”