NDC must borrow $22bn to achieve 75% of promises – IMANI

The next NDC administration, should President John Mahama win the December 7 polls, will need to borrow US$22 billion in order to be able to implement 75 per cent of the party’s 2016 manifesto promises, policy think tank IMANI has analysed.

In a critique of the manifesto highlights presented by President Mahama on Tuesday, IMANI said from the ballpark costing exercise performed on the scope of the NDC’s planned projects and programmes, the party would need to spend a sum of $24 billion over and above their five-year spending average if they are to implement 75% of their full manifesto.

“From an analysis of revenue growth, donor appetite for budget financing, and other net positives, $22 billion of the amount would have to be borrowed and added to the debt stock taking this country’s debt-to-GDP ratio above 100%.”

IMANI said the prevailing composite interest rate for total public debt will exceed the current effective rate of more than 9%.

“With the exchange rate hovering just about 8:1, the total debt service requirement in local currency will exceed 76 billion, a crazy 19% of then GDP, and an even crazier 50% of all Government revenues.

“The current account deficit will be in the 25% range, interest rates will be galloping at 70% and inflation will be hovering at 45%, while domestically the government would have no choice but to start borrowing at a 60% treasury bill rate making the 42% recorded in 2001 look rather tame.

“At these levels, inflation, weekly changes in the price of goods, shortages of fuel at the pump, rolling blackouts, and a repressive forex regime, would by now be commonplace and start feeding into the job market, as businesses rapidly downsize and investors nervously hunker in their bunkers,” IMANI said, warning: “Of course, things do not have to be this way.”