Government Economic Advisor and former Finance Minister, Seth Terkper, has identified three major recurrent expenditure items that he says are significantly draining Ghana’s revenue and hindering infrastructure development.
Speaking on Joy FM’s Super Morning Show on Tuesday, 1st July, Mr Terkper noted that compensation payments, interest on loans, and expenditure on goods and services, collectively known as recurrent expenditure, consume nearly 70% of Ghana’s total revenue.
He explained that compensation payments refer to the government’s wage bill, which includes salaries, allowances, and benefits to public sector workers.
“These are payments that are not directly tied to infrastructure development,” he said.
On the issue of debt servicing, he clarified: “It’s the interest on the loan, not the loan itself.”
“These are recurring payments the government must make on borrowed funds, and they take up a significant portion of revenue.”
The third drain, he noted, is the cost of goods and services needed to run government operations. This includes administrative expenses such as office stationery, fuel, and other logistics.
“They consume so much,” he emphasised, pointing to the scale of spending on non-capital areas.
Mr Terkper warned that these recurrent costs severely limit the government’s ability to fund critical development projects such as road construction, gas processing plants, and railway infrastructure.
“So when you spend so much on these general expenditures, you have very little left for road constructions, for gas processing plant, for railways, the things that we call capital expenditure,” he stated.
He called for urgent reforms to contain current expenditure and free up fiscal space for investments in long-term infrastructure that directly impacts national growth and development.
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