The minority in Parliament is predicting a GH₵50billion increase in Ghana’s debt by June 2020 in what they describe as “an epidemic of borrowings”.
Ghana’s debt is currently hovering around GH₵200billion due to the $16billion dollars borrowed by the Nana Akufo-Addo led administration barely 3 years in power; despite being voted into power in 2016 because of a promise not to borrow.
In a statement, the minority in Ghana’s Parliament is predicting the Akufo-Addo government will add GH₵130billion to the debt stock it inherited if it continues its spate of borrowing.
“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,” the group stated.
The minority believes the current spate of borrowing is fast eroding the gains of the rebasing exercise undertaken by the Akufo-Addo administration upon assuming office.
The rebasing exercise undertaken by the Vice President Dr. Mahamadu Bawumia led Economic Management created substantial fiscal space that the minority is accusing government of eroding with its borrowing.
“The current spate of borrowing threatens to erode the fiscal space provided by the rebasing of the economy started in 2016 and which was concluded in September 2018. It is obvious that the President views rebasing as an opportunity to engage in unbridled borrowing aimed at consumption related expenditure,” the group explained.
The minority further indicated that the increased borrowing is having a toll on the Ghanaian economy as government is struggling to keep up with its debt servicing obligations with tax revenue unable to cater for interests and the government wage bill.
“What is more worrisome is the fact that the government’s excessive borrowing has triggered rigidity pressures emanating from the cost of debt service due to rising interest payment and amortization,”
“Published fiscal data for the first quarter of 2019 shows that government tax revenue cannot even pay for debt service and as well cover the wage bill. The cost of debt service and the wage bill cost in the last three (3) years has exceeded our tax revenue,” they indicated.
The minority says the level of borrowing the Nana Akufo-Addo led government is engaged in, is a clear indication that the NPP has brought no new thinking and policy to the management of Ghana’s economy.
“It is obvious, that contrary to the lofty talk. President Akufo-Addo and his government lacks the capacity to keep to their promise of not borrowing, they have no new or exceptional economic management ability beyond the empty talk and are mortgaging the destiny of our future generations to reckless borrowing decisions,” the minority stated.
