Ghana’s debt stock is being projected to hit GH¢250 billion in the coming year.
According to the Minority in Parliament, the Akufo-Addo/Bawumia-led New Patriotic Party (NPP) government is set to increase the country’s indebtedness by approximately GH¢130 billion in just a little over three years in government.
The Minority disclosed this at a press conference in Parliament on Thursday, indicating the NPP has so far added GH¢80 billion to the public debt in just over two years, raising the debt to GDP ratio from 56% in 2016 to 58%.
Ranking member of the Finance Committee, Cassiel Ato Forson, who addressed the media noted government’s own issuance calendar for the second quarter of this year shows GH¢21.1 billion will be borrowed with net amount of GH¢566 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 GH¢250 billion by this time next year. This will be addition of about GH¢130 billion,” he stated.
He warned the current spate of borrowing threatens to erode the fiscal space provided by the rebasing of the economy in 2016, which was concluded in September 2018.
Mr. Ato Forson accused the Akufo-Addo administration of lacking capacity to keep to its promise not to borrow contrary to lofty talks while in opposition.
According to him, per current figures of the national debt, each of the 27 million Ghanaians owes GH¢6,827.00, highlighting the worsening standard of living in the country.
Bloomberg last week reported Ghana’s current public debt (approximately GH¢200 billion) is the highest in four years and makes Ghana one of the countries with the greatest debt distress risk in the world.
The Ranking member expressed concern at what he described reckless borrowing of the NPP, stressing this marks a betrayal of the trust reposed in President Akufo-Addo and the NPP after promising in opposition not to borrow.
“Not only has the President’s insatiable appetite for borrowing exposed that promise as hollow, it also shows he and his team do not possess the competence they claimed to have to generate domestic revenue to finance the national budget,” he stated.
Ato Fortson argued despite this unprecedented level of borrowing President Akufo-Addo does not have any significant capital investments to show unlike his predecessor.
“President Mahama invested borrowed funds in major capital investments across all sectors of the economy from education, health, housing, roads, railways, energy, communications, aviation and transport among others.”
“Almost all major projects currently ongoing are those for which funding was secured under President Mahama or had began under him.”
He indicated President Akufo-Addo’ inability to show tangible outcomes for the excessive borrowing raises serious concerns about prudence of government’s borrowing decisions.
According to him, addition of the GH¢80 billion to the national debt does not include loans earmarked for the year including the new borrowing of GH¢750 million of commercial loans, the GNPC new borrowing of GH¢200 and government’s request for GetFund to borrow GH¢1.5 billion.
Mr. Ato Fortson noted that beyond the excessive borrowing, the Akufo-Addo-led government has had more money at its disposal than all governments and therefore should have done far more than what is happening currently.
Analysis of government’s three budgets statements since 2017 indicates tax revenue alone has brought in about GH¢113.4 billion (US$21 billion) while GH¢3.8 billion (US$713.11 million) has come in by way of grants.
The Ranking described the amount of grant received as ridiculous by a government that projects an end to foreign assistance.
“Put together, President Akufo-Addo has had over GH¢200 million inflows and yet is unable to point to anything of significance since coming to power,” he stated.
He accused the President of resorting to sophistry and deceit to explain his failure after government’s unbridled borrowing aimed at consumption related expenditure.
He warned that the impact of the current development means Ghanaians would be burdened with more taxes while provision of social services would continue to suffer as the months roll on under the Akufo-Addo government.