Blaming coronavirus for ballooning public debt is misleading – Sammy Gyamfi

The National Democratic Congress (NDC) has described as misleading the governing New Patriotic Party’s claim that the coronavirus pandemic is the reason Ghana’s public debt is ballooning.

NDC Communications Officer, Sammy Gyamfi, said coronavirus-related spending accounts for only 2.5% of the widening fiscal deficit.

“Despite promising to maintain fiscal discipline, Ghana’s fiscal deficit has galloped and is projected to hit 16.4% by December 2020, with COVID-19 accounting for only 2.5%.

"This will be the worst fiscal deficit Ghana has ever recorded since independence,” he said on Wednesday, October 28, 2020, during a press conference at the party’s headquarters.

The government, under Akufo-Addo, has added up to GH¢86.6 billion to the public debt stock, a trend that has been criticised by some economists and the Bretton Woods institutions.

As of the end of September 2019, Ghana’s public debt was about GH¢208.6 billion, according to data from the Bank of Ghana.

Speaking at the press conference, Sammy Gyamfi said despite promising to reduce government borrowing, President Akufo-Addo has borrowed more than any government in Ghana’s history, with very little to show.

“Today, our current debt position is unsustainable and the worst ever in our 4th Republican history,” he added.

Mr Kwarteng told Citi FM that the Nana Addo Dankwa Akufo-Addo government needed to borrow more to offset the COVID-19 challenges, however, this was done within the global average.

“We have had to incur our debts because of COVID-19 and therefore if you look at the global average, different situations will call for different considerations.

“So we want to do below 70 but when you have COVID-19 to deal with; when you have a financial sector situation to deal with and you have legacy debt, you may have to incur some debt before you stabilise the economy,” Citi FM quoted the Deputy Minister in a report.

According to the NDC, this justification is not accurate.