A minority warns the government against the swelling of the national debt

Policy for Friday, June 7, 2019

Source: Graphic.com.gh

2019-06-07

The minority in Parliament accused the government of increasing Ghana's debt burden and using the money on consumption instead of investing in investments or developing infrastructure.

At a press conference held in Accra on Thursday, Minority Finance Spokesperson Cbadiel Ato Forson said the government had incurred a debt of 120 billion GHc and had added 80 billion GH ¢, bringing the total debt to 200 billion.

"You can do all the propaganda on the figures of the aesthetic budget deficit, but the debt of the Republic will show your finesse," he said.

Along with Deputy Minority Leader James Avedzi, and a member of Parliament's Finance Committee, Mr. Fifi Kwetey, Mr. Forson, who is ranked first in the Finance Committee, said that the minority caucus Parliament had taken note of the latest report of the Monetary Policy Committee of the Bank of Ghana and took note of the current public debt, which amounted to nearly 200 billion GH ¢ at the end of the first quarter of 2019.

"The national debt of 200 billion GH ¢ represents an increase of about 80 billion GH ¢ in the last two and a half years of President Akufo-Addo and has increased the ratio debt / gross domestic product (GDP) from 56% in 2016 to almost 58%, "he said.

promises

Forson said the opposition New Patriotic Party (NPP) had promised not to borrow and said the NPP in the government had
benefited from a 25% increase or increase in GDP due to the redesign of the strategy.

Once again, he said the government inherited two other oil deposits (Sankofa and TEN), whose production had almost tripled and whose price had risen by an average of 60%.

Mr. Forson said that at the current exchange rate, the only loan had given President Akufo-Addo a staggering $ 16 billion over the period.

He added that the figure does not include the 5.7 billion GH ¢ borrowed from the ESLA bonds of last year.

Forson said, as Bloomberg said last week, that Ghana's current public debt was the highest of the last four years and made Ghana one of the countries with the highest risk of debt distress. world.

Surprisingly, he said, "this government has benefited more in terms of oil revenues collected since 2017".

Disturbing signals

Mr Forson said the minority caucus was deeply concerned about the government's unwitting borrowing of NPP and had demanded accountability.

"This scale of borrowing marks a betrayal of the trust that was given to the president after he and his vice-presidential candidate had promised not to borrow because, according to them, we had all the necessary resources to finance our development.

"Not only did the president's insatiable appetite for loans reveal that this promise was hollow, but it also shows that his team and himself do not possess the skill they claimed to have to generate domestic revenue to finance the national budget.

"It is even more disturbing to note that, despite this unprecedented level of borrowing, President Akufo-Addo has no significant capital investment, unlike his predecessor, President Mahama, who has invested funds borrowed in major investments in all sectors of the economy, in education, health, housing, roads, railways, energy, communications, aviation, transport, among others ", a- he declared.

Consumer spending

Mr. Forson said that almost all of the major ongoing projects were those for which funding had been secured under President Mahama or started under him.

He said President Akufo-Addo's inability to show tangible results for excessive borrowing raises serious concerns about the prudence of his borrowing decisions.

Mr. Forson recalled that, in opposition, the then candidate, Nana Akufo-Addo, and her second, Dr. Mahamudu Bawumia, claimed that the NDC's government of time spent for consumption and that they could not see what was done with the funds.

"We note that in addition to this important loan, President Akufo Addo had more money at his disposal than all other governments and should have done much more than is currently done.

Mr Forson said the total oil revenues collected between 2017 and 2018 and expected in 2019 currently amount to 12 328 703,024.81 GH ¢.

"An badysis of the budget statements submitted since 2017 shows that tax revenues alone generated about 113.4 billion GH ¢ ($ 21.4 billion at the current exchange rate) over the last two and a half months.

"In addition, GH ¢ 3,079,523,324,422 ($ 713.03 million) has been received in the form of grants since 2017 – by a government that plans to terminate foreign aid, of course in the form of grants. A slogan Together, President Akufo-Addo has GH ¢ 200 billion and yet unable to report anything important since coming to power.

"The government's issuance schedule for the second quarter of this year indicates that another loan of 12.1 billion GH ¢ will be borrowed, with a net amount of 566 million GH ¢ added to the outstanding by the end of June Our estimate, based on this trend, is that the public debt will reach about 250 billion of GH within one year, or 130 billion GHS more ", a- he declared.

Forson said the current wave of borrowing was threatening to erode the fiscal space created by the economic overhaul that began in 2016 and ended in September 2018.