Finance Minister, Seth Terkper
Members of the New Patriotic Party (NPP) in Parliament, led by the Deputy Minority Leader, Dominic Nitiwul, yesterday fiercely engaged the Minister of Finance, Seth Terpker and the Majority National Democratic Congress (NDC) in a heated debate over the NDC government’s appetitive for contracting loans.
The Minority believed the NDC government was burdening Ghanaians with more loans after Parliament had, by a resolution, approved a number of loans totalling more than $600 million in addition to a fresh $1.5 billion Eurobond loan.
About GH¢550 million of the loans approved by Parliament yesterday would come from the International Development Association to support next year’s budget.
President John Mahama, early this year, in an interview with Angel Fm, said Government of Ghana cash could not be used for development projects, emphasising on contracting more loans.
The Minister of Finance, Seth Terkper, yesterday confirmed in Parliament that Ghana’s current debt was over GH¢90 billion as at May – about 67.5% of the country’s Gross Domestic Product (GDP).
Due to this, the Minority expressed fear that Ghana might be heading towards the Greece syndrome, as the country suffocates under a heavy debt burden.
It had been projected that the debt stock might hit over GH¢100 billion by the close of the year.
Chairman of the Public Accounts Committee (PAC) of Parliament, Kwaku Agyemang-Manu, said Ghana’s economy would collapse if the borrowing craze by government was not addressed.
According to Mr Agyemang-Manu the decision by government and its Finance Minister to keep borrowing to repay loans already contracted might well lead the country into the economic doldrums Greece was going through.
“We should never forget the challenges Greece is going through…If we are not careful we shall see exactly what Greece is going through,” he warned.
Mr Terkper, before presenting his mid-year review of the 2015 budget yesterday, had laid in Parliament another paper requesting the august House to approve an amount of $1.5 billion for the government’s 2015 Eurobond Financing Plan in respect of liability management and general budget support.
But the Minority strongly opposed it, saying it would contravene the laws of the House since Parliament had already approved $1 billion this year for the same purpose.
Deputy Minority Leader Dominic Nitiwul said all those loans which were coming in concessionary forms had not made any impact on the economy, which was still seeing a downward growth.
He asked the Finance Minister and the Majority what the government had used all the loans for, prompting a sharp response from the Majority Chief Whip, Mohammed Mubarak Muntaka, who said the deputy Minority Leader was a member of the Finance Committee and therefore must be in a position to know the purpose for each loan agreement which members of the committee had satisfied themselves with before they were approved by Parliament.
The Majority Leader, Alban Bagbin, also said it was wrong for the deputy Minority Leader to ask what the loans had been used for, since Parliament always satisfied itself with each loan agreement before approving same.
Hon Bagbin noted that various standing and select committees of Parliament had been put in place to spearhead oversight role of Parliament and therefore the committees had the mandate to exercise those oversight responsibilities to know whether the loans contracted were being put to good use.
But Dominic Nitiwul, together with most minority members, indicated that various committees of Parliament were there on paper but were not able to function effectively because the NDC government had intentionally starved the committees of funds and the necessary resources to be able to exercise their oversight responsibilities for reasons best known to the government.
“I agree that all external loans come through Parliament but what about the domestic loans the government contracts from the domestic market which form about 60% of the loans that had been borrowed but are not brought to Parliament for scrutiny,” Nitiwul shot back.
The MP for Effutu, Alex Afenyo-Markin, said if the managers of the country’s resources prudently managed the revenue generated locally, there would not be any need for the country to depend on loans for its development.
According to him, it was very shameful for this country to constantly run to the international market or donors to borrow money while huge revenues from the oil industry and other sectors were being mismanaged by people put in charge of running the affairs of the country.
“When Kufuor was leaving government in 2008, the economic growth was at 7.3% and he had left behind a total debt stock of just GH¢9.5 billion. But now this government has overwhelmingly increased the debt stock to over GH¢90 billion in less than seven years, yet economic growth has slumped to 4%,” he noted, stressing that Ghanaians would like to know where all those monies had been invested which rather had a negative impact on the economy.
In respect of the new $1.5 billion, the Speaker of Parliament, Edward Doe Adjaho, said it was indeed not consistent with the standing orders of the House and that he was not sure whether or not the government was seeking an additional GH¢500 million Eurobond to the $1 billion already approved by Parliament.
He, therefore, called on Seth Terkper to consult with the leadership of the House and the ranking member of finance for the necessary correction in respect of the new request by government to be effected.
