ECONOMIST DR. KUSI BOAFO SHARES INSIGHTS ON GOVERNMENT'S ROAD AND SCHOOL LOAN PROPOSAL

Economist Dr. Kusi Boafo has shared his views on the government's proposed US$800 million international loan, describing borrowing as a necessary tool for national development when used prudently and strategically. The comments follow the John Dramani Mahama administration's submission of its first US$800 million international loan request to Parliament to support education and road infrastructure. The proposal has generated public debate, particularly in light of the government's pre-election stance on borrowing. Speaking in a telephone interview with Nana Nhyiraba Kwabena Asirifi on ICAD TV's Ghana Nti Morning Show, Dr. Boafo said borrowing is a common practice across the world, but its impact depends on how effectively the funds are invested. According to him, every government under the Fourth Republic has resorted to borrowing to finance key development projects, contributing to Ghana's public debt. «"Every government under the Fourth Republic, whenever it comes into power, goes for loans to complete specific projects, which contributes to the country's public debt," he stated.» Dr. Boafo said he supports the government's decision to seek financing for critical infrastructure but questioned the political narrative often associated with borrowing. He argued that while political parties frequently promise during election campaigns not to take loans, they are aware that borrowing is often unavoidable to complete major national projects. He maintained that such campaign promises do not always reflect the economic realities facing governments. The economist further explained that Ghana's domestic revenue remains inadequate to meet the country's development needs. He noted that after servicing existing debts, only a small portion of government revenue—estimated at less than 10 to 15 percent of what is required—is available for development projects. As a result, governments regularly rely on Treasury bills and other borrowing instruments to finance their expenditure. Dr. Boafo also commended the work of the GoldBod, saying it has helped generate much-needed resources for the country. However, he stressed that the revenue currently available is still insufficient to fund all priority projects, making additional borrowing necessary. Edited by Deborah Naaki Dowuona.