COVID-19 loans were spent on consumption not production hence new taxes- Economist

A chartered economist, Mr. Enoch Okunnah, has reiterated that government has no option to manage the economy of the country than to resort to taxation as a result of the covid-19 pandemic and other expenses the government incurred in the previous year.

He was commenting on the vetting of the designated Minister of Finance, Ken Ofori Atta, by the Parliamentary Appointment Committee, who returned to the country from the United States of America where he travelled due to ill health.

Speaking in an interview with the media on Friday on Ark in the Morning, Mr. Okunnah, who is President of DUMAT Africa, stated that most of the loans acquired by the government were spent on consumption instead of production, which did not have any significant impact on the economy.

He mentioned the energy sector debt, revitalization of the banking sector, and the Covid -19 pandemic on which the government spent huge sums of money, major factors that have drained the nation’s economy, forcing the government to find other avenues to revive the economy.

Government cannot engage huge borrowing per the status of the country’s debt ratio to GDP, the chartered economist said, noting that foreign donors were all struggling to manage their economies as a result of the pandemic hence the government’s decision to resort to taxing.

Mr. Okunnah added that though the current administration had done better in terms of revenue mobilization, this had not made any significant impact on the economy but supported the government's decision of no huge increment on wages.