Africa requires fiscal discipline - Bawumia

Dr. Mahamudu Bawumia, 2016 running mate of the New Patriotic Party has indicated that African States require fiscal discipline, reliable energy supply and private sector support for an economic success on the continent.

According to him, there must be critical shifts in the mindsets of African governments to ensure significant economic growth and transformation.

Dr Bawumia speaking at the 7th Private Equity in Africa Summit in London Thursday October 28, 2015, said “We are seeing severe fiscal indiscipline. The current government has an insatiable appetite for debt. It has been on a borrowing binge – the debt to GDP ratio is over 70%.

Interest on government debts this year will be four times Ghana’s oil revenue – and that’s just the interest. “They’ve already gone to the IMF this year for a $1 billion bailout, and now they’re looking for more loans. But when you’re in a hole, you need to stop digging.”

Dr. Bawumia added that "There are plenty of things that can be done to fix the problems we’re facing in Ghana and to spark confidence in our economy. We can change our tax policies – restructuring away from current policies that are killing jobs and destroying companies. We can and should introduce changes that allow companies to produce, to prosper. Then when they’re actually making profits, the government can benefit from taxing them."

He said "Ghana has tremendous potential; that’s the truth. There’s no limit to what we can achieve and how high our economy can climb. The steps to get there are clear to me: we must stabilize the macroeconomy, exhibit fiscal discipline, support and enable the private sector and deliver a reliable energy supply for our people and businesses."

The Summit was organized by the Financial Times & the Emerging Markets Private Equity Association, the global industry association for private capital in emerging markets whose member firms put together manage over a trillion dollars in assets globally.

The 7th Private Equity in Africa Summit considered the role that the private equity industry – which has been amongst the most active in responding to Africa's commercial opportunity – can play in harnessing Africa's growth for economic transformation in the coming years.

The former Deputy Governor of the Bank of Ghana was one of the main speakers along other speakers including David Cowan, Head Africa Economist and Managing Director of Citigroup and Nick Blazquez, President, Africa and Asia of Diageo.

Other panelists included Aubrey Hruby, a Non-resident Senior Fellow at the Africa Center at the Atlantic Council. She is the former Managing Director of the Whitaker Group, an Africa-focused corporate strategy and investment advisory firm that has helped facilitate more than $2 billion in investment and capital flows to Africa and someone who has worked with Fortune 500 companies to design and implement successful investment and market entry strategies and advised the U.S. Chamber of Commerce's Africa Division.

Bruce Zimmerman was the last panelist for the discussion. He is the CEO and Chief Investment Officer of The University of Texas Investment Management Company (UTIMCO). UTIMCO, investing approximately $28B, is one of America's largest endowments. Prior to joining UTIMCO, Zimmerman was CIO and Global Head of Pension Investments at Citigroup. Previously at Citigroup, Bruce had been CFO and Chief Administrative Officer for Citigroup Alternative Investments, which invested over $90B in proprietary and client capital across a range of hedge fund, private equity, private real estate equity and structured credit vehicles.

The Emerging Markets Private Equity Association (EMPEA) has over 300 member firms comprising institutional investors, fund managers, and industry advisors who together manage more than US$ 1 trillion of assets and have offices in more than a 100 countries across the globe.

An Oxford-educated economist, Dr. Bawumia worked as lecturer in London and the United States before returning to Ghana in 2000 to head the Monetary Policy and Financial Stability Department for the Bank of Ghana. He was appointed as Deputy-Governor of the Bank of Ghana in 2006.