Government using statutory funds as collateral – Analyst

An energy analyst, Ishmael Edjekumhene, has accused government of using statutory funds as collateral for borrowing and deferring expenditure to justify that it will not overrun its 2016 budget.

President John Mahama in his 2016 State of the Nation Address in parliament vowed that government will not exceed its budget this year but Mr Edjekumhene, in an interview with Class News, alleged that government was deferring its huge expenditure to fulfill that promise.

“…You see all the road works that are suddenly showing up all over the place, I think it’s a smart way of going round the problem by saying that they are using some of this statutory funds as collateral for loans, so whereas in the past they probably would have found money or borrowed from the Central Bank to do these projects, in an election year, what is happening is that they will go to the banks and say that we are using the road fund as a collateral and they are borrowing, so in borrowing, they are deferring it and spreading it over a period of time so that’s what they are doing,” Mr Edjekumhene stated adding that “it’s a smart way of deferring the expenditure that they are making this year and spread it over a period of time but we will all see very soon whether they will be able to do it”.

Meanwhile, Deputy Finance Minister, Cassiel Ato Forson said government’s decision not to overrun its budget this year is a step in the right direction.

“In 2000, the then administration overspent, what happened? They lost. In 2008, Kufour’s administration overspent, what happened? They lost. So winning election does not necessary mean when you overspend you will win or lose elections; they are two different things. So what we are saying is that we’ve seen evidence of people overspending and still losing elections. We believe that the stability that we’ve brought this economy will deliver the second term to the president. We will for the first time communicate to Ghanaians and to the world that Ghana’s government is strong enough to win elections without overspending,” he noted.