Contracting foreign loans not wrong - Finance Minister justifies govt's borrowing

Ken Ofori-Atta, Minister of Finance, has justified government's resort to accessing loans from foreign entities like the International Monetary Fund (IMF) to improve the economy.

The Akufo-Addo government has been vehemently criticized for turning to the IMF and also quoting huge amounts of money to salvage the economy from the effects of the COVID-19 pandemic.

Delivering the 2020 mid-year budget review in Parliament on Thursday, July 23, 2020, the Finance Minister told the legislative House that the country has been badly affected by the novel disease and to resuscitate the economy, the government is initiating some developmental projects financed by foreign agencies.

He quoted some huge sums of money the government is ready to pump into the economy which has become a topical issue.

"Right Honourable Speaker, when I presented the President’s 2020 budget, all the indicators of the economic performance pointed towards the path of sustained consolidation and robust broad-based growth. The evidence of our superior economic management was clear for all to see. Honourable Members of this Parliament approved for Government to spend Ninety-Eight Billion, Thirty-six million, six hundred and ninety-two thousand, three hundred and fifty-eight Ghana cedis (GH¢98,036,692,358) in the 2020 fiscal year to further the agenda for consolidating the gains to spur growth, jobs and prosperity for all.

Mr. Speaker, we wish to take this opportunity to announce to the people of Ghana that their President and his team have done a lot of thinking since March. We have brainstormed over the crisis with the view of using the challenges it presents rather as an opportunity to transform Ghana and for all Ghanaians. I am happy to announce that in the coming weeks the President will launch a Gh¢100 billion development programme. An ambitious and unprecedented three and half years programme called: Ghana CARES, “Obaatan Pa” which will anchor the comprehensive transformation of our society''.

There are criticisms about the government going for loans to fund the development projects it intends to introduce to improve the country.

The criticisms are premised on the fact that President Akufo-Addo promised Ghanaians his government will end the culture of taking loans from foreign entities; one of the factors that led to his victory in the 2016 elections.

But, according to the Finance Minister, there is nothing wrong with going in for loans if only its purpose will benefit Ghanaians.



He told host Kwami Sefa Kayi on Peace FM's ''Kokrokoo'' Friday morning that the culture of securing a loan facility under the Akufo-Addo government is different as compared to the previous Mahama administration's habit, because the current administration ensure the monies are put into good use.

''What you use the money for, is what's important...So, going for loans is not wrong but what you use it for is critical. When you take a loan and invest in your people and obtain skills for the future, I don't think anything could be better than that. Because I strongly believe in the genius of the Ghanaian enterpreneur, so we have to build the confidence for people to be able to do what they have to do.

''But if you're always afraid of things, like F.D Roosevelt once said fear is the one that will rarely cripple you. When you look at where we were in 2017 and where we've come today amidst the COVID-19, even with the COVID-19, let's take it as an opportunity to move forward. But we can't be afraid to run from doing big things'', he insisted.