Ghana’s Information Minister, Mr Kojo Oppong Nkrumah, has denied claims by the Minority in Parliament that the Akufo-Addo government has, within two years, added GHS80 billion to the country’s public debt stock.
On Thursday, 6 June 2019, the Minority projected that Ghana's public debt stock will hit GHS250 billion by 2020 based on the current ballooning rate of the debt stock.
Ghana’s debt stock is now US$38.9 billion (GHS198 billion), GHS2 billion shy of GHS200 billion as of March 2019.
According to the Bank of Ghana’s Summary of Economic and Financial Data – May 2019, the debt stock represents 57.5 per cent of Ghana’s GDP as of March 2019.
In January this year, the total public debt was GHS176.6 billion (US$35.7 billion) and GHS180.7 billion (US$35 billion) for February.
The figure for January and February represented 51.3 per cent and 52.5 per cent of GDP.
A total of GHS21.4 billion was added to the public debt in the first three months of 2019.
The current debt is inclusive of the US$3 billion Eurobond issued by the government in March this year.
Speaking at a press conference in parliament, the Ranking Member of Parliament's Finance Committee, Mr Cassiel Ato Forson, said the Akufo-Addo government has betrayed Ghanaians with its reckless borrowing.
Mr Forson said the Minority’s GHS250 billion projection by 2020 does not include the GHS750 million commercial loan that the government has taken and another US$1.5 billion that was contracted by the GETFund as well as an additional US$200 million of the Ghana National Petroleum Corporation (GNPC).
“Our estimate, based on this trend is that the public debt will rise to about GHS250 billion a year by this time,” the MP for Ajumako/ Enyan/ Esiam Constituency noted.
“Next year by this time, don’t be surprised if your public debt gets to GHS250 billion. This is an addition of GHS130 billion as against what they inherited,” he added.
He was of the view that the “currently spate of borrowing threatens to erode the fiscal space provided by the rebasing of the economy that was started in 2016 and which was concluded in September 2018”.
Mr Forson observed that it was “obvious that the president views rebasing as an opportunity to engage in unbridled borrowing aimed at consumption-related expenditure”.
The Minority accused President Nana Akufo-Addo of being unable to show significant capital investments despite the resources at his disposal, adding that the president has rather “resorted to deceit to explain away his failure”.
“The Minority caucus is deeply concerned about the reckless borrowing of the NPP government. The extent of borrowing marks a betrayal of the trust reposed in the President after he and his then-Vice-Presidential candidate promised in opposition not to borrow because, according to them, we had all the resources needed to finance our development.
“Not only has the President’s insatiable appetite for borrowing exposed that promise as hollow, it also shows that he and his team do not possess the competence they claimed to have to generate domestic revenue to finance the national budget.”
“If we are to pay for debt and pay for wages and salaries because they are all statutory, you need more than your total revenue to be able to service that, so, I am surprised that the Finance Minister is saying that it is not a problem because you can pay for it. You cannot pay for it because the total revenue is not enough to pay your wages and salaries and service your debt.
“In fact, the situation is even worse if you take the statutory payment out because remember that the total revenue includes what we have for GETFund, National Health Insurance and District Assembly Common Fund. If you are to take that out, you have about 130 per cent, so, the situation is bad… Please let us not allow them to use debt to GDP to convince us.”
Responding to the Minority’s figures at a counter-press conference on Friday, Mr Oppong Nkrumah said: “With regard to the external loans, all of those loans are given approval by Parliament in accordance with Article 181 of the Constitution 1992 and sections 55, 56, 57 of the public financial management Act, Act 921 for which the Minority is a party. You can add up all the loans this administration has taken to Parliament and it will not come near 80 billion.
“Indeed, if there was a list of loans that add up to 80 billion, you will imagine that the Minority will put up that list by now. The reason for which our debt stock today will show a difference of about 80 billion is that the figures are a nominal public debt stock and the public debt stock figure is made up of a number of things. Old loans that are now being disbursed within the tenure of this administration add to the public debt stock. It does not mean our administration has gone to borrow.”