Next govt faces significant challenges from 2026-Terkper
By Elvis DARKO, Accra
Former Finance Minister Seth Terkper has expressed concerns about the significant challenges the next administration will face starting in 2026, when the suspension of debt payments will end. He believes that Ghana has postponed problems that will only worsen in the future.
Mr Terkper cautioned against repeating past mistakes such as hiding debt or mismanaging energy projects and emphasized the need for honest reflection and accountability.
He pointed out that Ghana is currently relying almost exclusively on short-term borrowing in Treasury Bills for liquidity management.
Speaking on Zed in the Morning ahead of the mid-year budget presentation, he highlighted how the haircuts from the Domestic Debt Restructuring Programme (DDEP) have destroyed domestic markets, which had become the largest fixed income markets on the Ghana Stock Exchange.
He called for sober reflections, acknowledging that 2024 marks 40 years since the Structural Adjustment Programme and the Economic Recovery Programme were launched.
Terkper questioned the Ministry of Finance’s failure to update its fiscal data on its website since June 2023, violating the Public Financial Management Act and the Fiscal Responsibility Act.
He stressed the importance of transparency, noting the absence of information on debt, which is required to be reported and tabled in parliament.
He cautioned against relying on primary and fiscal balances, arguing that it makes the government overly complacent and emphasized the lack of fiscal space and the ongoing default status.
He noted that the suspension of debt, which Ghana initially refused during COVID-19, could have been an opportunity from the World Bank.
Mr Terkper highlighted that negotiations under external debt restructuring were conducted under the same debt suspension framework, with multilateral agencies, particularly China and the Paris Club, playing key roles.
Terkper also pointed out the adverse impact of the government’s haircuts on the domestic market, especially for self-employed individuals whose investments and interest payments have been affected.
He criticized the numerous taxes and levies that businesses complain about and suggested consolidating them into fewer taxes to simplify the system.
He emphasized the importance of strengthening core taxes such as Value Added Tax (VAT), income tax, excise duty, and import duties while phasing out additional levies once the country exits austerity.
He called for the rationalization of taxes and strengthening of core tax instruments to stabilize the economy.
