John Mahama advocates legislation to restrict government debt accumulation

Former President John Mahama has called for the implementation of a law that would limit the amount of loans successive governments can borrow from international creditors.

Ghana’s total debt ended the year 2022 at GH¢434.6 billion, equivalent to 71.2% of the country’s GDP. Albeit lower than the November 2022 Debt to GDP ratio of 94.3%,the total public debt saw an increment in USD terms from 43.9 billion to 52.2 billion in December 2022.

Speaking at the 7th Ghana CEOs Summit in Accra, Mahama, the Flagbearer of the opposition National Democratic Congress (NDC), argued that the absence of a legal framework has led to unchecked borrowing, resulting in a heavy debt burden and frequent reliance on International Monetary Fund (IMF) assistance.

“With the current reality of the government being shut out of the international credit market, this government will continue to voraciously borrow on the short end of the market and effectively crowd out the private sector. We must conduct reforms that will ensure that Ghana never suffers such a deadly debt management programme that threatens to send elderly people holding government bonds to an early grave and also wipe out the investments of the middle Ghanaian middle class. My proposal here will be that we pass a legislation as part of public financial management act to put a cap on governments debt accumulation”, he remarked.

Meanwhile, the convener of the Ghana CEOs Summit, Ernest Degraft Agyiri, emphasized the importance of creating a conducive environment for businesses to thrive in the country. He called for the passage of legislation that promotes ease of doing business by enhancing transparency, improving efficiency, and reducing bureaucratic practices within government agencies.

“The facilitative role of government in ensuring businesses thrive cannot be under estimated. Against this background, the CEO’s Network Ghana will continue to reiterate its call for the passage of legislation to promote the ease of doing business in the country. Such legislation will require government agencies to promote transparency in their services to the public by improving efficiency and reducing the bureaucratic practices “, he stressed

Daniel Kwadwo Owusu, Managing Partner of Deloitte Ghana, echoed the concerns about the business environment and urged the government to alleviate the tax burden on industries during the mid-year budget review.

“My proposal is based on government post covid-19 program on economic growth which aims at restoring macroeconomic stability and debt sustainability. With the IMF program on board, government should use the mid-year budget statement to review some of the revenue measures introduced in the 2023 budget” he said.

Kyle Kelhofer, the Senior Country Manager for Ghana, Benin, Sierra Leone, and Togo at the International Financial Corporation, highlighted his organization’s investments of over four billion dollars in Ghana’s private sector. He viewed Ghana’s IMF deal as an opportunity for resilience and sustainable economic growth.

The Ghana CEOs Summit, an annual event initiated in 2016, brings together leaders from the public and private sectors to exchange ideas, discuss challenges, and propose solutions to shape policies that support economic development. Distinguished Chief Executive Officers (CEOs) from various industries were recognized and honored during the summit, serving as a motivation for others to incorporate best practices in their work.