Mahama backs cap on external borrowing to address debt crisis

Former President John Dramani Mahama has pledged that the next NDC government will amend the Public Financial Management Act (ACT 921) of 2016 to cap the amount of money the country can borrow from external creditors.

Speaking during a community engagement at Dodowa in the Shai Osudoku constituency as part of his campaign tour of the Greater Accra Region, the NDC flagbearer stated that the move is to ensure fiscal discipline, accountability, and prudent management of public finances.

Mr. Mahama explained that the debt management department at the finance ministry will be made a self-governing body charged with updating the public on debt-to-GDP ratios quarterly.

He noted that the reason the NPP government was able to go on a borrowing spree was because they were not upfront with the several billions of dollars they borrowed in Eurobonds.

“There is no transparency in our debt management. The only time we hear how much we owe as Ghanaians is when the Finance Minister is reading the budget and tells us what our debt-to-GDP ratio is. The NDC is going to change that.

“We’re going to make the Debt Management Department of the Finance Ministry a separate, autonomous department. It will be an authority and it will have a head who will be autonomous and will publish every quarter what our debt-to-GDP numbers are.

The NDC flagbearer added that his government would cap borrowing to keep it in check and avoid the Executive from repeating the ill of incessant borrowing.

“Aside from that, we are going to change part of the Public Financial Management Act and will put a clause there that caps how much a finance minister can borrow,” he said in response to how he will address the country’s debt crisis.

Mr. Mahama pointed out that if there was an agreement in parliament that debt could not exceed 60% of GDP, the Minister of Finance would be bound by the amendment.

The opposition leader, who accused the governing New Patriotic Party of “destroying” the country’s economy, said it was the youth who were going to shoulder the burden of repayment when the actual borrowers have left the scene.

“So who is going to pay that debt?” he asked. “It is you, the young people here, who are going to pay.”