Ghanaian business mogul, Dr Kofi Amoah has bemoaned the excessive borrowing by successive governments in the country and the poor management of borrowed funds.
Speaking on The Point of View on Monday, Dr. Amoah said Ghana’s continuous borrowing to service old debts makes the economy operate like a Ponzi scheme, a situation he believes is unsustainable; suggesting that governments adopt what he calls the “multiplier effect” for borrowed monies.
“If you borrow US$1 billion to do a flyover, in my estimation, the flyover is important but what is more important is the multiplier effect within your economy. So when this money comes in and the contractor is a Ghanaian company, he is hiring Ghanaians, he is buying the materials for doing the projects in Ghana, there is a multiplier effect. The workers now have more money, and they can now spend more on food among others and those who deal in food will also have more money. You are now totally transforming your economy,” he said.
On the contrary, he said, hiring foreign contractors for projects leaves no benefit to the country.
“At the end of the day, of course, cars will experience less traffic, but you will now be left with a concrete structure with a debt of US$1 billion, how are you going to pay it?” he quizzed.
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