The Minority in Parliament has accused the government of increasing Ghana’s debt burden and using the money on consumption instead of capital expenditure or infrastructure development.
Speaking at a press conference in Accra Thursday, the Minority Spokesperson on Finance, Mr Cassiel Ato Forson, said the government met a debt of GHc120 billion and added GH¢80 billion bringing the total debt to GH¢200 billion.
“You can do all the propaganda about the cosmetic fiscal deficit numbers, but republic debt will show your smoothness level”, he said.
Flanked by the Deputy Minority Leader, Mr James Avedzi, and a member of the Finance Committee of Parliament, Mr Fifi Kwetey, Mr Forson, who is the Ranking Member on the Finance Committee, said the Minority Caucus in Parliament had noted the latest report of the Monetary Policy Committee of the Bank of Ghana and taken notice of the current national debt which stood at almost GH¢ 200 billion as of the end of the first quarter of 2019.
“The GH¢ 200 billion national debt represents an increase of about GH¢ 80 billion in the last two and half years alone by President Akufo-Addo and has raised the debt to gross domestic product (GDP) ratio from 56 per cent in 2016 to almost 58 per cent”, he said.
Mr Forson said the New Patriotic Party (NPP) in opposition had promised not to borrow and indicated that the NPP in government had
benefited from a 25 per cent bonus or increase in GDP due to the rebasing exercise.
Again, he said the government inherited two additional oil fields (Sankofa and TEN) that had almost tripled output and at an average 60 per cent price increase.
Mr Forson said at current exchange rate levels, borrowing alone had given President Akufo-Addo a staggering $16 billion over the period.
He said the figure did not include the GH¢ 5.7 billion borrowed under the ESLA Bonds last year.
Mr Forson said as reported by Bloomberg last week, Ghana current public debt was the highest in four years and made Ghana one of the countries with the greatest debt distress risks in the world.
Surprisingly, he said, “this is a government that has benefited more in terms of oil revenues received since 2017”.
Mr Forson said the Minority Caucus was deeply concerned about the reckless borrowing of the NPP government and demanded accountability.
“This extent of borrowing marks a betrayal of the trust reposed in the President after he and his then Vice-Presidential candidate promised in opposition not to borrow because according to them, we had all the resources needed to finance our development.
“Not only has the President’s insatiable appetite for borrowing exposed that promise as hollow, it also shows that he and his team do not possess the competence they claimed to have to generate domestic revenue to finance the national budget.
“It is even more worrying that despite this unprecedented level of borrowing, President Akufo-Addo does not have any significant capital investments to show unlike his predecessor, President Mahama, who invested borrowed funds in major capital investments across all sectors of the economy from education, health, housing, roads, railways, energy, communications, aviation, transport among others”, he said.
Spending on consumption
Mr Forson said almost all major projects that were currently ongoing were those for which funding was secured under President Mahama or had begun under him.
He said President Akuffo-Addo’s inability to show any tangible outcomes for the excessive borrowing raises serious concerns about the prudence of his borrowing decisions.
Mr Forson recalled that in opposition then candidate Nana Akufo-Addo he and his Running Mate, Dr Mahamudu Bawumia, claimed that the then NDC government was spending on consumption and that they could not see what was being done with the funds.
“We note that in addition to this heavy borrowing, President Akufo Addo had had more money at his disposal than all other governments and should have done far more than is being done currently.
Mr Forson said said the total oil revenue that had been received between 2017 and 2018 and was expected to be received in 2019
currently stood at GHC 12,328,703.024.81.
“An analysis of the budget statements presented since 2017, shows that tax revenue alone has brought in about GHS 113.4 billion ($ 21.4 billion at current exchange rate) in the last two and half years.
” In addition to this, GHC3,779,523,324.42($713.03 million) has been received in the form of grants since 2017—by a government that projects an end to foreign assistance, obviously as a slogan. Put together, President Akufo-Addo has had over GHS 200 billion and yet is unable to point to anything of significance since coming to power.
“Government’s issuance calendar for the second quarter of this year shows that another GHS 12.1 billion will be borrowed with a net amount of GHS 566 million being added to the debt stock by end of June. Our estimation, based on this trend, is that the public debt will rise to about GHS 250 billion in a year by this time. This is an addition of about GHS 130 billion”, he said.
Mr Forson said the current spate of borrowing threatened to erode the fiscal space provided by the rebasing of the economy started in 2016 and which was concluded in September 2018.