He said despite the agreement with the Ghana Insurers Association, caution needs to be taken since the entities that watched on for the Government to excessively borrow into this current crisis are the same entities to supervise risk mitigations.
Mr Dwamena, in an interview with the Ghana News Agency (GNA), was of the view that the country could a not fford to risk vehicle insurance that would be needed during an eventuality.
He contended that exempting vehicle insurance would not significantly impact the government’s DDEP because the government needs to first demonstrate its commitment to ensuring financial stability rather than falling on individuals’ funds safeguarded for unforeseen circumstances.
He indicated that insurance penetration was low in Ghana due to a widespread notion of unwillingness to pay claims to subscribers.
“According to our Driver MO 2022 report, the benefit of vehicle insurance is yet to be realized because most subscribers have reported that they subscribe to third-party to avoid police harassment and also to fulfil statutory obligations, making most Ghanaians reluctant to report for insurance claims,” he stated.
Mr Dwamena explained that the National Road Safety Authority (NRSA) reported that a total of 17,272 vehicles were involved in accidents of which about 1,900 lives perished in 2022 and therefore, there was the need for the readiness of funds to compensate victims during any eventuality.
He said the DDEP was an invitation involving GH¢137 billion exchanges for domestic notes and bonds and promises to deploy all regulatory and supervisory tools to mitigate risks to financial stability.
He noted that the current situation with debt to GDP hovering around 97%, was not a sudden event but an accumulation of reckless borrowing and spending.
Mr Dwamena cautioned that it was time to put a ceiling on government borrowings and provide a transparent and participatory process for the increment of such ceilings if the need arose.
Also, the government must approach the crisis holistically and demonstrate commitment by reducing the size of the government, employing fiscal discipline, and cutting down not only spending but also reducing government waste.