Each Ghanaian Owes 20 Million Cedis Under NDC -

Philip Tamakloe is a carpenter at the Wood Village in Kumasi. He works hard to take care of his pregnant wife and two Children. When he wakes up in the morning, he does not think of NPP or NDC; he thinks of going to work to earn money to feed his family. In Tamale, Kofi Mathew drives his taxi everyday, without any off day, just to earn enough money to barely get by. Mathew and his wife Ama are expecting their first child in three months. In Takoradi, the harbor has been busy since the oil discovery. But along with increased work came increased competition for Daniel Quansah, who now has to work harder to earn money as a welder to support his pregnant wife and one child. These three men have much in common. But their common situations pale to insignificance in comparison to the common debt that each of their children would inherit on their very first day in the world. These children at birth would each be indebted up to 20 million cedis if President Mills and the irrational government he presides over are allowed to have their way with their wild borrowing spree.

Not a drop of oil has been produced yet, but already the anticipated income is being committed to ill-conceived programs designed not to structurally develop our nation, but to score cheap political points. ALL TOLD, THE NDC GOVERNMENT WOULD HAVE GHANA INDEBTED UP TO $32 BILLION. THIS INCLUDES THE $6 BILLION WE CURRENTLY OWE, $10 BILLION FROM THE KOREAN STX SAKAWA SCHEME, AND $16 BILLION IN MORE LOANS FROM THE CHINESE. This is over 100% of the Gross Domestic Product of our country – it has never happened in the history of our country.

If Ghana has waited for 53 long years, why can’t we be cautious for a few more months to make an accurate income forecast from the oil revenue before we begin this reckless spending spree? Under this incompetent NDC administration, Ghana is acting like the struggling graduate who just got a new job after years of interviews. The moment he was hired, even before he actually began working or before he knew what his salary would be, he bought a new car, a new house, changed his wardrobe, and got himself a wife all on borrowed money. Least on his mind is what pitfalls lay ahead to potentially torpedo his continued employment. If this young man gets it wrong, he has himself and his wife to pay the consequence; if we get it wrong as a nation, the children born to Tamakloe, Mathew, Quansah, and all Ghanaians would be saddled with a debt of 20 million cedis each due to our recklessness, and that cannot be allowed to happen.

What makes this borrowing spree reckless is that it places Ghana in such a financial abyss that would take almost two generations to climb out of. Taking a loan from China is like taking a loan from the Pawn Shop or a loan shark; the terms are prohibitive. China is lending us about $16 billion to be repaid in 20 years. That means our payments alone, excluding interest, is $800 million a year. With our current revenue of $4.5 billion and expenditure of $6.1 billion (a deficit of $1.6 billion), not only would Ghana, as a nation not be able to make the loan payments, we would be adding another $1.6 billion bill to our indebtedness every year. Not even the anticipated oil revenue would be enough to make up the difference.

At peak production, we would be producing 120,000 barrels per day (bpd). With royalties, actual and paid stake combined, 22,800 bpd will come to Ghana. That translates into $1.73 million daily in revenues. Factor in average production cost of 70% and our real daily income is $519,000. Add petroleum tax on the partners, and our total daily income from oil is roughly $1.6 million. That is an annual oil income of $584 million. THE BOTTOM LINE IS THAT OUR ESTIMATED ANNUAL OIL REVENUE WOULD BE $584 MILLION, BUT WE WOULD HAVE INCURED AN ANNUAL LIABILITY OF OVER $890 MILLION.

No one is against developing our nation, but we must do so in a financially responsible manner. To be clear, NPP has been, and will continue to be adamant about developing the northern parts of our country. During our eight years in government, developments in electricity, agriculture, education, healthcare, transportation, and many more were extended to the north. In fact, the blueprint for the construction of rail to link the southern sector and Paga was developed by the Kufour administration, and it was one of the reasons why the Ministry of Ports Harbors and Railways was established. Then Minister Professor Ameyaw-Akumfi worked tirelessly in an effort to secure a Build, Operate, and Transfer (BOT) agreement, which costs Ghana a minimal financial commitment, for the Northern Rail Line. Discussions to that effect were in advanced stages before the change in government occurred. The inept NDC government elected not to pursue the negotiations, but rather secure a loan facility from a Pawn Shop to build the northern rail line.

Of all the administrations that have run this country, both imposed and elected, this NDC administration is by far the worst in terms of jeopardizing our national destiny. It is mathematically impossible for us to repay this loan facility. Further, our proven reserves would run out in twenty years if the planned rate of production serves as a barometer. Why then would we leverage ourselves to such exorbitant levels only to pass the responsibility of repayment to our children and grandchildren? This loan facility is irresponsible, reckless, and outright silly to even entertain let alone sign for. Ghanaians must reject this reckless spending spree with every fiber of our beings. Our nation’s future is on the line.