Professor Stephen Adei, the Chairperson of the National Development Planning Commission, has joined calls for the government to cut spending in order to improve the economy’s performance.
According to him, the country is in trouble, and a probable cut in the salaries of government appointees and holders of Article 71 offices will assist to alleviate the situation.
On JoyNews’ UpFront on Wednesday, Prof. Adei was interviewed by Raymond Acquah.
A cut in spending, he believes, will assist the administration in mobilizing finances to solve the country’s pressing developmental concerns.
“Why should a country like Ghana have about four or five ministries of transport? … It’s incredible. In other countries, we have one minister, and then we have technical heads of these institutions. So we can reduce the size of government … Actually, under this circumstance, I think that the executive and other things must have a pay cut; maybe 25% will do”, he stated.
He went on to say that if the government does not consider cutting some of its spending, the economy will continue to deteriorate, thereby aggravating the current scenario.
Given the government’s present debt profile, he believes that government costs should be reduced to aid in the repayment of outstanding obligations.
“If you are exceeding your income, then you must accept to live below your income, which is the easy way, otherwise if you are earning GHC3,000 and you are in debt of GHC10,000 you cannot day to day spend GHC3,000. For you to get out of the rag you will have to cut your expenditure to GHC2,000 because you must service your debt. So we are in that situation as a country”, he said.
Prof. Adei added, “…And they [government] must thank God that this crisis has come now and not 2023, because if they don’t go for the hard one now, which normally will take about 18 months to go over this type of hunch, then they have a good chance by the middle of 2023 to see some good results in 2024. If not, things would get worse and they want to prevent being thrown out of government, they would be thrown out anyway.”
Ghana’s current public debt stock astonishingly stands at 341.8 billion Ghana cedis, with a debt-to-GDP ratio of more than 77 percent as of September 2021.