President Mahama assures investors

President John Mahama has assured private businesses and investors of keeping the financing deficit in check in order to boost the economy.

According to the President, government is working to correct excess spending in the budget and is also keen to control expenditure.

He indicated that his government is committed to taking tough and prudent measures to keep its expenditure within the approved budget, which he maintains is critical to reduce cost of borrowing.

“We have introduced a public debt management strategy that tries to control government borrowing. We are trying to create a situation where we don’t crowd out the private sector. Happily, if you look at the statistics, crowding is reducing, because government reduced continuously its domestic borrowing.

Indeed we are doing some substitution, if you have noticed, some of the Eurobond that we floated have being to take out the more high interest domestic debt and so sometimes when we go on the Eurobond market, it is not to finance the budget, but to reduce the incidence of domestic debt as a burden on the budget” he stated.

The persistent assurances from policymakers over controlled spending and economic stability stem from the governments’ penchant for overspending in election years as evident in the last elections in 2012, which saw the budget deficit rose the highest to 11.8 percent.

The fallout of this deficit surge in election years is that interest or debt-service costs have increased sharply soon after, with the economic situation worsening by a crippling three-year energy crisis, inconsistent inflow of donor budgetary support, falling commodity prices, rising inflation and constant currency devaluation.

Due to the constant over-expenditure in election years, investors and the business community in general have now adopted a ‘wait-and-see’ attitude before making critical business decisions.

-President John Mahama has assured private businesses and investors of keeping the financing deficit in check in order to boost the economy.

According to the President, government is working to correct excess spending in the budget and is also keen to control expenditure.

He indicated that his government is committed to taking tough and prudent measures to keep its expenditure within the approved budget, which he maintains is critical to reduce cost of borrowing.

“We have introduced a public debt management strategy that tries to control government borrowing. We are trying to create a situation where we don’t crowd out the private sector. Happily, if you look at the statistics, crowding is reducing, because government reduced continuously its domestic borrowing.

Indeed we are doing some substitution, if you have noticed, some of the Eurobond that we floated have being to take out the more high interest domestic debt and so sometimes when we go on the Eurobond market, it is not to finance the budget, but to reduce the incidence of domestic debt as a burden on the budget” he stated.

The persistent assurances from policymakers over controlled spending and economic stability stem from the governments’ penchant for overspending in election years as evident in the last elections in 2012, which saw the budget deficit rose the highest to 11.8 percent.

The fallout of this deficit surge in election years is that interest or debt-service costs have increased sharply soon after, with the economic situation worsening by a crippling three-year energy crisis, inconsistent inflow of donor budgetary support, falling commodity prices, rising inflation and constant currency devaluation.

Due to the constant over-expenditure in election years, investors and the business community in general have now adopted a ‘wait-and-see’ attitude before making critical business decisions.

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