Use Eurobond to grow economy

Since the beginning of the year, the economy has witnessed a number of challenges, resulting in slow growth.

The implementation of the Single Spine Salary Structure (SSSS) has created a major headache for the government. Cash flow has been affected by the numerous challenges facing businesses and personal incomes.

Many ministries, departments and agencies (MDAs) have not received any subvention since the beginning of the year.

Caterers under the Ghana School Feeding Programme have not been paid since the beginning of the year, while the level of government indebtedness to contractors has resulted in the government putting a hold on the award of new contracts.

The election petition is also seen as a contributory factor to the slow economic growth, as many investors have adopted the wait-and-see attitude.

The dire straits in which the economy found itself had given the impression that the Eurobond project was going to be failure. In fact, many doubted if the Eurobond was going to be patronised at all.

Fortunately, the bond has been over-subscribed and, all things being equal, the money is expected to hit state coffers this month.

Besides the debate surrounding the need to raise the money, Ghana has a history of disagreements over the use of Eurobonds. While governments had wished to invest the money in particular sectors of the economy, others had always thought otherwise.

There have also been occasions when governments have redirected the funds to other sectors of the economy other than the originally intended ones.

The Daily Graphic, therefore, heaves a sigh of relief that the government has stated publicly that the money to be derived from the Eurobond will be invested in infrastructural projects.

We are convinced that pumping the money into infrastructural projects will have a multiple benefit for the economy, as many contractors will not only get new contracts but also the government will be in a position to settle its indebtedness to the contractors.

The Daily Graphic urges the government to stay focused on the path it has chosen to ensure that it pushes its development agenda.

The over-subscription of the Eurobond also demonstrates a renewal of confidence in our economy and encourages the government to go to the open market to look for funds to carry through its development agenda.

This option also gives the government an opportunity to leave the local financial market for business entities and thereby widen the space for the private sector to raise funds to expand businesses.

The Daily Graphic thinks the move by the government is appropriate, except that going forward, we should look internally to raise funds for critical programmes.

Daily Graphic/Ghana