Former Finance Minister and government adviser on finance, Seth Terkper, says the current administration inherited a deeply distressed economy, with unpaid debt obligations, high inflation, and severe fiscal pressure.
Speaking on PM Express Business Edition on the impact of the losses recorded by the Bank of Ghana, he said the scale of the inherited economic difficulties must not be ignored.
“We inherited a situation where debt was suspended and not paid, and we risk being kicked out of the IMF program with disastrous conditions,” he said.
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He said the government also took office at a time when confidence in Ghana’s debt market had collapsed.
“We inherited a situation where the ratings of our bonds were junk,” he stated. Mr Terkper added that the broader fiscal environment was also under heavy strain.
“We inherited a situation where, let’s say, the fiscal was just in a mess, where inflation was high with a huge deficit,” he said.
His remarks came after the host observed that public opinion at the time was that the economy was stable.
In response, Mr Terkper defended the early actions taken by the Finance Ministry, arguing that immediate intervention was necessary to stabilise public finances and reduce pressure on the central bank.
“You seem to be downplaying what the Minister for Finance was doing,” he said.
According to him, one of the first major steps was to tighten control over public funds.
“The Minister for Finance moved in quickly to mop up loose government cash,” he said.
He argued that the move was critical in protecting the central bank from continued fiscal pressure.
“That prevented the Bank of Ghana, or saved the Bank of Ghana from continuing to finance government,” he stated.
Myjoyonline