Economist and Political Risk Analyst, Dr Theo Acheampong has said it was good the government did not request additional funds in the supplementary mid-year budget.
He explains that, this was due to expenditure deferments and interest savings.
In his address to Parliament on Tuesday, the Finance Minister noted key achievements and outlined the government’s plans for the rest of the year.
Dr Amin Adam acknowledged global economic challenges but expressed confidence in Ghana’s economic trajectory.
Speaking on the JoyNews AM Show, Mr Acheampong said, “So revenues were down, if you look at the numbers that were accompanying the mid-year budget in paragraphs 57 and 58 of the documents, you see that there is a bigger cut in expenditures vis-à-vis the revenue.”
The economist said that when one looks at the actual financing of the deficit, it gives him a bit of cause for worry.
Dr Acheampong explained that, according to paragraphs 22 and 60 of the mid-year budget, 72% of the funds (7 out of every 10 cedis) the government plans to borrow to finance the deficit will come from the domestic market.
He noted that, the government will continue issuing treasury bills and other instruments, resulting in high borrowing costs.
“Not only that, but it actually also means that businesses would have to compete with the government for the same liquidity or capital to do their business, and that is very challenging for businesses in terms of getting access to capital.”
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