Borrow a lot if you can repay – Minister of Finance

Company News of Friday, May 31, 2019

Source: Myjoyonline.com

2019-05-31

The finance minister has insisted that the Akufo-Addo administration will continue to borrow despite concerns over Ghana's debt.

Ghana's debt has increased by 22 billion cedis in the last four months to a total of 198 billion ¢, or 57 percent of GDP.

However, while the government is preparing to launch the ambitious 38-year development program, Ken Ofori Atta believes that it is not inappropriate that the Akufo-Addo government continues to borrow.

Borrowing is a thorny political term in Ghana and an important topic of discussion in the 2016 election won by the New Patriotic Party (NPP), to expel the National Democratic Congress.

The NPP blamed the NDC for "excessive borrowing" and promised to be more accountable with the public purse.

The public debt at the time of the installation of the nuclear power station was about 122 billion cedis at the end of 2016. It accounted for 74% of the country's gross domestic product (GDP).

In three years, it has increased by 76 billion cedis. The finance minister has argued that the incomes of the current generation are insufficient to support the country's development agenda.

"Our needs are considerable," he told Joynews Kwesi Parker Wilson.

Regarding continuous borrowing, he said, "any project requires both equity and debt that need to be effectively combined effectively to enable you to generate the revenue to support what you have borrowed. "

According to him, it is up to the country to find the middle ground to make it possible.

"Borrowing is not bad if you have the resources to pay it back and the balance you realize. To determine the source of resources, you badyze the international market, including your own national scene, and determine how you will do it, "he said.

He argues that developed countries like Japan account for 300% of the debt in relation to GDP and that they are able to do so because they have put in place an infrastructure to generate income.