Contributory Shackles to Unsustainable Public Borrowing Appetite of Ghana and Its Impact on Economic Growth

Abstract

A triangular socio-economic contributory shackle to Ghana’s fiscal management practices is observed. Notably, a National, Institutional and Community level socio-economic shackles are systemic in the democratic governance structures and found to have very profound negative effect on Annual Tax Revenues and GDP Growth. Total Public Debt was found to have both long-run positive (0.10%) and negative (0.12%) effect on GDP using Variable Selection and Stepwise Least squares (VARSEL) model. Proposed radical solutions to the contributory shackles could free significant fiscal space for phenomenal economic investments that are more likely to make Ghana exit its structural developmental gaps over a decade. The essay concludes by postulating an optimal total debt level of 30% of GDP; a reorganization of the national parliament, employment of technology in revenue collection, critical investments in effective transport network, agriculture, education and reliable national internet connectivity.