‘Are we going to continue borrowing to finance free SHS?’ - Terkper demands answers in Mid-Year Review

Former Finance Minister, Seth Terkper, says he expects the Mid-Year Budget Review in Parliament on Thursday, July 23, 2020, to clarify the financing mechanism of the Free Senior High School programme.

The Finance Minister under John Mahama's administration said on Citi TV’s Point of View, a current affairs show, that it is important to know if the current administration will continue financing its flagship education policy through borrowing.

“What I expect [on Thursday] is the fact that we are using 2.2 billion Ghana cedis of the Sovereign Bond to finance free SHS; so are we going to continue borrowing to finance free SHS?” he asked.

The Mid-Year Budget Review to be presented by Finance Minister Ken Ofori-Atta on Thursday is highly anticipated as it will be the first since the coronavirus pandemic decimated key aspects of Ghana’s economy and threw targets overboard.

The budget review presentation is in accordance with Section 28 of the Public Financial Management Act, 2016 (Act 921) and is expected to touch on key economic indicators such as growth rates, primary balance, budget deficits, revenue and expenditure targets among others.

He is also expected to provide to Parliament a clear-cut plan on how the government intends to pay back GH¢10 billion it borrowed from the Central Bank to finance coronavirus induced budget deficit as well as the $1 billion IMF Rapid Credit Facility (RCF) loan and $219 million drawdowns from the Stabilization Fund and to help deal with the adverse impacts of the Covid-19 pandemic.

Among the many expectations of Mr Terkper ahead of the budget review, he also wants a clear statement on the cost of the revenue-guzzling free SHS policy to Ghana’s economy after huge oil revenue was used to finance its start.

“We need to know,” Seth Terkper stressed.

The former Finance Minister also said Mr Ofori-Atta must do well to reconcile the country’s fiscal data with that of the International Monetary Fund (IMF).

He told host of Point of View, Bernard Avle, the continuous exclusion of exceptional expenses by the Government of Ghana in its fiscal reporting will always result in some differences between its data and IMF’s as the latter unlike GoG, includes all exceptional expenses and arrears in its fiscal data reporting.

His admonition on the fiscal data reconciliation follows inconsistencies in fiscal data presented to Parliament in March 2020 by the Finance Minister and that of the IMF.