Govt should not jubilate over recent economic gains – Terkper
Former Finance Minister Seth Terkper has cautioned the government against celebrating recent economic gains, asserting that the economy has not yet turned the corner.
He emphasized that the government must avoid past complacencies when dealing with the economy’s performance.
“There is no need to be jubilant—the view that we have made progress is premised on the sacrifice and largesse of domestic bonds and external lenders (bonds/loans) that have suffered and will suffer haircuts,” he said.
Terkper argued that data from fiscal, financial, monetary, and macroeconomic sources indicate that the economy is far from stable.
He warned that relying on the country’s legacy may not make it third-time lucky after the Highly Indebted Poor Countries (HIPC) initiative, and stressed that the country should not have defaulted again.
“The path to domestic and external financial markets remains blocked—as we depend on Treasury Bills and short-term notes to finance the budget.
“As the debt restructuring outcomes are confirmed, the government is leaving the ‘heavy lifting’ to successor governments and generations—whose ‘reserves’ and ‘buffers’ are depleted,” Terkper disclosed.
He called for sober reflection, noting that the legacy of default after HIPC is unlikely to be lucky a third time.
Terkper expressed concern about using the primary balance as a key performance criterion, stating, “We are convinced that the use of primary balance, given the International Monetary Fund’s data, will make us complacent again.”
He added that data and graphs show that the “primary balance” is inferior and less critical for a country that has defaulted and is aiming for debt forgiveness.
While he welcomed the restoration of the “sinking fund,” he noted that it was too late for the immediate future due to significant “humps” between 2026 and 2028.
Terkper continued, pointing out that the best public debt performance of nearly 70.0% is expected in 2028, compared with 57% in 2016.
