Business News Wed, 26 Oct 2016

Interest payments expenditure worrying – Minority

A member of the Finance Committee of Parliament, Dr. Mark Assibey-Yeboah has questioned the GH¢1.9 billion to be expended on interest payments for the first quarter of next year, out of a total expenditure of GH¢10.9 billion.

Dr. Assibey-Yeboah, who is also the MP for New Juaben South, comments follow Parliament’s authorization of government to withdraw about GH¢11 billion from the Consolidated Fund for the purpose of meeting expenditure necessary to carry on the services of government prior to the coming into operation of the Appropriation Act in respect of the 2017 financial year.

According to him, “…We did not just get here, we have gotten here because of our insatiable appetite for borrowing. So when the next President comes into office, in the first three months, he has to make interest payment of GH¢1.9billion.

“Why do we saddle the next President with such a burden?,” he said.

He explained that in eight years, the country has moved its total public debt from GH¢ 9.5 billion to over GH¢110 billion, which has culminated in the GH¢1.9 billion payment of interests in the first quarter of next year.

Non-Road Arrears, Dr. Assibey-Yeboah said, in the first three months will amount to GH¢518 million, indicating that, “these arrears have been sitting on government’s books since 2015 and will have to be borne by the next President.”

On the amortization of loans, which is made of up of the external principal payment of the country’s loans, the amount allocated was GH¢733 million.

“If you put the interest payments, non-road arrears and amortization, it is GHc 3.2billion, of the GHc 11billion being sought now. Twenty-nine percent is just going into interest payments, and amortization of loans, which is not going to provide schools, roads, electricity or water,” he said.

Minority Member of Parliament for Bosomtwe, Simon Osei-Mensah also questioned why interest payments was more than the capital expenditure.

Capital expenditure was pegged at GH¢1.2 billion and according to Mr. Osei Mensah, the country’s growth will be retarded if the rate of borrowing is not stopped.

Deputy Finance Minister, Mona Quartey however, justified government’s borrowing, maintaining that the rate of growth of debt has actually been going down.

“The rate of growth of debt is not increasing has he sought to suggest, it is not going up by the rate that he is referring to. We do need to look at this expenditure during the transition period and then when we come back in February, we will discuss the budget,” she said.

Source: B&FT