The minority in Parliament has raised alarm over Ghana’s growing debt stock, which, they claim, if not managed properly, could send the country back to HIPC.
According to them, the debt situation was pushing Ghana to a level that could best be classified as debt-distressed state.
“When you have a one-off GDP boom as a result of oil and hide behind it to say the economy is doing well, it is a mistake,” the Minority said through their spokesperson, Mr Cassiel Ato Forson
Mr Ato Forson, the Ranking Member on the Finance Committee, raised the alarm when he spoke to the media in Parliament after the report of the Finance Committee on the annual public debt for 2017 financial year was presented to the House.
Mr Forson also stated that the New Patriotic Party (NPP) administration inherited a debt of GH¢ 122.3 billion as at 31st December, 2016, and that by December 31, 2017 the country’s debt stock had increased to GH¢ 142.6 billion.
He said the amount excluded the recently issued energy sector bond of GH¢ 4.7 billion as well as UT and Capital bank bond of GH¢ 2.3 billion.
He said within the past 12 months the NPP administration added GH¢ 28 billion to the country’s debt stock and stated that despite the government’s increasing debt, they had nothing tangible to show for the expenditure.
He said the government must invest the borrowing into concrete projects that could repay for itself.
“If you go out there and borrow for consumption, the multiplier effect is zero,” he said.
Mr Ato Forson also expressed concern about the government announcing new policies, which were not backed by revenue and that in the long term, it was likely to increase the debt of the country.
He said over GH¢ 5 billion out of the $2.25 billion (GH¢ 9.3 billion), which the Minister of Finance announced was going to be used for debt re-profiling was not used for its intended purpose and urged the various state-owned enterprises (SOEs) to be responsive and responsible to repay their debts to the state.
He said the government secured about GH¢10 billion loans for the SOEs and for now their debt service was overdue for most of them but they were not paying back.
“The SOEs, the way they are going, are also going to drag the nation into the debt distress situation,” he added.
Mr Fuseini Issah, Member of the Finance Committee, in his reaction, debunked the claims of the Minority saying the economy was now in a better shape than in 2016.
He said all the indices in the economy pointed to a better trajectory due the sound macro-economic policies put in place by the government.
He said in 2017, the government focused on five cardinal areas — revenue management, expenditure management, the wage bill, and the debt situation — and also introduced the capping law, which helped to sustain the economy last year.
Mr Issah also stated that the NPP administration inherited an economy with a debt of over GH¢122 billion and the debts were growing at 36 per cent.
He said, however, that in 2017, the country’s debts grew by only 13 per cent, showing marked improvement over 2016.
He said the addition to current stock of debt was GH¢ 20.2 billion, not the GH¢ 28 billion the minority would want the world to believe.
Mr Issah also stated the NPP government had been able to manage the country’s debt much better than the previous administration and also refuted the Minority’s claim that the country was heading back to HIPC, saying the current government had been able to manage the debt situation on more sustainable basis.
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