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Former Communications Minister, Edward Kofi Omane Boamah, urged the current government to curb borrowing.
Former spokesman John Mahama, former spokesman, said in a statement that the current government was responsible for about 40% of Ghana's total debt since independence, a testament – according to him – according to which the government in place, led by Akufo-Addo, would plunge the country into a debt crisis.
"Yes, in less than three years, President Akufo-Addo's government alone is responsible for nearly 40 per cent of Ghana's total debt since independence. In reality, while the mantra is "Ghana Beyond Aid", the real mission is "Ghana begging for help," he teased.
He said Nana Akufo-Addo had plunged Ghana into "an unprecedented endless debt vortex, contrary to her 2016 promise."
According to him, the debt situation of Ghana is a disappointment because during the 2016 election campaign, the then-candidate, Akufo-Addo, had hinted that he would not have to borrow to develop Ghana because the country already possessed enormous wealth.
"In addition, irreconcilable differences between their own words, namely that Ghana has so many resources and therefore has no need to borrow, while it is obvious that they borrowing excessively, is unacceptable.
"In simple terms, this government has broken the sacred trust on which they were elected. The record low debt of 80 billion GHC challenges the highly discredited mantra of "Ghana Beyond Aid" and also threatens the development of current and future generations of Ghanaians, "concluded Mr. Omane Boamah.
Read the full statement below.
Ghana's growing debt and the need to curb urgently
The debt of 80 billion GHC so far
It's official! The government has borrowed about 80 billion GHC in record time, and there is very little to show for this gigantic addition to debt. Debt has increased from 122 billion GHC since independence until 2016; nearly 200 billion GHC in 2019.
Yes, in less than three years, President Akufo-Addo's government alone has accounted for nearly 40 per cent of Ghana's total debt since independence. In fact, while the mantra is "Ghana Beyond Aid", the real mission is "Ghana Begging for Aid".
Obviously, as sad as it may be, the government is blatantly digging into the problem of borrowing and, if it is not stopped, it means that the present and future of Ghana are buried every time a loan agreement is concluded. George Carlin once remarked, "I think we should just go ahead and make 'zillion' a real number. "Gazillion", it seems to me that it's time to do it. "
Yes! George, you were right in the context of Ghana's current indebtedness, and I share your thoughts, because twelve years ago (2007), Ghana cleaned up four zeros (0000) when it reformulated its currency. Without this singular exercise, your prediction could have been realized given the wave of loans that we have experienced in the last two and a half years.
Hidden debts
But our debt is much higher than the announced figure. Like many Ghanaians, I am concerned about Ghana's indebtedness because, characteristic of all economic indicators, there are limits; and for the national debts that fuel fiscal deficits, one of these limitations is hidden debt or what Mankiw (2013) calls "unrecognized liabilities".
For example, hidden debts include pensions that are essentially deferred compensation or "loans" that Ghanaian workers have granted to the government while waiting for the security of their retirement income.
Indeed, during the celebration of May 1, 2019, various workers lamented and warned against the huge debt of the government vis-à-vis their pension funds and against attempts to falsify the pension of the security services CAP30.
In addition, any debts resulting from public guarantees such as:
– pledge of the Ghana Trust Fund for Education (GETFund);
– GHC 2 billion in trust funds pooled in Ghana for some collapsed banks;
– more than 4.7 billion GHC bonds in the energy sector; and
– Sinohydro facility of 600 million US dollars, up to 2 billion US dollars, among others.
Where is the money?
More often than not, when governments have been confronted with the question "Where is the money?", Their default position has been to list specific and concrete programs and projects to account for what is wrong. They borrowed. In addition, refinancing debt has been a standard answer. However, in the case of the current administration, there is very little to show for the gigantic 80 billion GHC borrowed in the last two and a half years.
Thus, they have often sought to justify their unprecedented spending on consumption through the constitutionally mandated Free High High School program, which has introduced a "dual track" system for students and students. parents. I am not against S.H.S. How could I be a social democrat whose tradition presided over the 1992 Constitution?
But their mathematics do not add up when we contextualize the total expenditures in Free SHS with the amount of tax and non-tax revenues accumulated under this administration – thanks to the visionary and multisectorial ingenuity of John Mahama, including including its strategic investments in the oil and gas industry.
Here are some examples of new and additional sources of revenue that have emerged since the government took over nuclear power plants: products from the ENI / Sankofa deposits; the tax on the energy sector, among others.
In addition, the tax "annoying" on luxury vehicles; the surreptitious and diverted increase in the VAT rate; and the extension of the duration of some other taxes, all by this government that has covertly promised to shift Ghana from taxation to production, have also generated more revenue.
So what is the problem of this government, which has neither met with the crippling "dumsor" nor faced a useless election petition of nearly a year? What is their excuse? … And so I ask again: "Where is the money and / or what was it used for?
The big disappointment
Beyond the question asked, "Where is the money?", Which is even more disturbing and misleading, the president's unenviable loan record goes against his pbadionate appeal and emotional that he deployed to persuade Ghanaians of the 2016 elections.
In Twi, he explained that "Yes sika so nanso kɔm de yɛn". In a nutshell, he meant, among the abundant resources, locally, Ghanaians are hungry. In addition, it is important to situate his speech, titled "YeT sika so nanso kɔm de yɛn", within his vice president, Dr. Bawumia, who was known to the people, and who knew that Ghana was rich. or vice versa.
These statements were just some of the many but hollow counterarguments to the cautious and clever borrowing strategy, which has given rise to important beneficial projects under His Excellency John Dramani Mahama.
Among these beneficial projects include the Ridge Hospital, the University of Ghana Medical Center, the Upper West Regional Hospital, the 800 km Oriental Corridor Optic Project, the Data Center. national, the digital center of Accra, the community's secondary schools, the Kasoa Interchange, among other countries.
Nana Akufo-Addo has undoubtedly seen the various development projects that her predecessor had efficiently developed in record time; therefore, they must not borrow at this rate, contrary to their own election promises.
I do not suggest at all, as James Madison wrongly did, "A public debt is a public curse." No! On the contrary, I agree with Alexander Hamilton's proposition that "a national debt, if not excessive, will be a national blessing for us". The emphasis here is on "excessive".
I also share the views of many Ghanaians who believe that the debt of 80 billion GHC in record time, with virtually nothing to prove, is painfully "excessive", no matter how you look at it.
Indeed, without the recent rebasement of the Ghanaian economy, which incites or induces the government to borrow recklessly, the current debt-to-GDP ratio would have made Ghana a "highly indebted middle-income country (HIMIC)," "Bawumia". (2015)". – lack of better categorization.
Unfortunately, the great disappointment did not stop in the opposition, but continued in the government. Just a few days ago, Finance Minister Ken Ofori Atta misleadingly stated that "… the aid does not borrow …" https://www.youtube.com/ watch? v = IB5al1WKkaM. I invite him to read Hall and Midgley (2004: 262), London School of Economics, on how soft loans are also eligible for help. In addition, with respect to Mr. Ofori Atta's epiphany that "borrowing is not bad if you have the resources to repay it and the balance you get …" I'm tempted to take sides for those who find it condescending.
In addition, his suggestion that the ability to pay for loans should be a matrix of relevance for judging the effectiveness of borrowing is in itself full of inconsistencies.
Therefore, I have only four rhetorical questions:
– Is not it strange that the party / government claiming to have an unparalleled economic team in Ghana's history now only notices that all the loans are bad, now that they end up borrowing all the governments recently history?
– Did the Minister of Finance share this opinion with Dr. Bawumia and Nana Akufo-Addo when they were in opposition?
– Apart from General Ignatius Kutu Acheampong of the fame "Ye'n Tut" who openly declared that Ghana will not meet its obligations to the international debt, is there a government of Ghana which, from recent memory , acted in the same way?
– Finally, does Mr. Ofori Atta not know very well that his predecessor, Mr. Seth Terkper, has complied with the situation, so that he had planned, before his departure, the reimbursement provided for in 2017 the euro-bond that the Kufour administration had contracted in 2007?
Perhaps, if he had answered these questions sincerely and sincerely, Ghanaians would have been spared from his last opinions on loans.
Conclusion
In conclusion, Nana Akufo-Addo has plunged Ghana into an unprecedented endless debt vortex, contrary to her promise of 2016; it amounts to deception; and yet he has very little to show for the 80 billion GHC borrowed.
In addition, the irreconcilable differences that separate their own words that Ghana has so many resources and therefore does not need to borrow, while it is unacceptable that they borrow excessively.
In simple terms, this government broke the sacred trust on which they had been elected. The recording of an unenviable debt of 80 billion GHC compromises the highly discredited mantra of "Ghana Beyond Aid" and also threatens the development of current and future generations of Ghanaians.
President Akufo-Addo must therefore badume his responsibilities and apply the brakes on his borrowing strategy, which buries Ghana.
Dr. Edward Kofi Omane Boamah
Former Minister of Communications and Presidential Spokesperson
June 4, 2019
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