Professor Peter Quartey has criticized Ghana’s borrowing over the past two decades for failing to stimulate investment and economic growth, with funds primarily used for salaries instead. He advocates for a 60 percent debt ceiling, improved project selection, and a strategic investment framework. Quartey notes that capital spending has significantly decreased, highlighting the inefficiency in utilizing borrowed funds for productive developments.
Economist Professor Peter Quartey has expressed concern regarding Ghana’s extensive borrowing over the past two decades, noting that it has not led to the anticipated investment and economic growth. He emphasized that the substantial funds acquired have primarily been allocated for salaries and loan interest payments instead of enhancing productive sectors of the economy.
During his inaugural lecture as a Fellow of the Ghana Academy of Arts and Sciences, Professor Quartey advocated for enacting a 60 percent debt ceiling and establishing a framework that aligns loans with investments to yield returns. He discussed his findings on public investment’s limited impact on long-term growth, attributing this to subpar project selection and management processes.
Remarkably, Ghana’s debt increased from 42.9 percent in 2013 to 82.9 percent in 2023, with expectations of a decrease to 61.8 percent by the end of 2024 following a debt restructuring strategy. He indicated that capital expenditure, which funds essential public infrastructure, plummeted from 6.9 percent of GDP in 2010 to 2.4 percent in 2023, with a minor increase predicted for 2024.
Professor Quartey criticized the lack of a robust project approval system, particularly for major initiatives, which has led to significant delays and ineffective project execution. He provided the example of the Pwalugu multi-purpose Dam project, which has seen no progress despite a disbursement of US$12 million over six years.
He highlighted deficiencies in procurement practices, emphasizing that funds are not utilized efficiently due to insufficient competitive bidding. In his view, it is crucial to implement a framework that ensures strategic matching of debt with investments in productive sectors. Professor Quartey proposed that capital projects be chosen through a national development plan, focused on long-term strategies rather than political interests.
In conclusion, Professor Peter Quartey has raised important points regarding Ghana’s borrowing practices and their implications for investment and economic growth. His recommendations for improved project management and strategic investment planning signify necessary steps to ensure that borrowed funds are effectively utilized to foster economic development. The emphasis on a structured approach to public investment is essential for Ghana’s future growth and wellbeing.
Original Source: www.myjoyonline.com
