Kenneth Thompson, CEO of Dalex Finance and Leasing Company Limited, has recommended that the government slash spending drastically, saying that doing so is essential to the nation’s economic survival.
The financial analyst warns that if the government keeps up its current trend of massive and ever-increasing expenditures, there will be an impending economic downturn in 2024.
Mr. Thompson attacked Ghana’s $3 billion credit facility with the International Monetary Fund (IMF) in an interview with Umaru Sanda Amadu on Face to Face on Citi TV. He called the facility a pointless diversion that can’t help Ghana develop the fiscal discipline it needs to deal with its economic problems.
He emphasized the need for Ghana to make more significant cuts to its expenditure than it is currently doing.
“The issue is not domestic debt; it’s about spending within your means. The IMF is a red herring, a complete red herring for an economy worth $80 billion. $3 billion is nothing,” he stated.
“Assuming that the IMF brings fiscal discipline with the $3 billion, we still need to work on our expenditure, and that’s the key thing. And when we talk about reducing expenditure, we’re not talking about cutting off these bits of fat from our expenditure. We’re currently cutting bits and pieces of our expenditure. We need to axe off much of our expenditure, and that’s what we need to do.”
Mr. Thompson however urged the government to prioritize the protection of the poor and vulnerable in its efforts to reduce expenditure.
“As a country, what we must focus on now is how to protect the poor. If you talk about cutting expenditure, there’s a long list of things we can cut, but we need to protect the poor, and we need to focus on health, education, infrastructure, food, and everything else because we are in a very bad place.”
The Minister of Finance, Ken Ofori-Atta, is expected to present the government’s 2024 Annual Budget Statement and Economic Policy to Parliament on November 15, 2023.
