Osei Kyei-Mensah-Bonsu (right) with Prof George Gyan Baffour at the press conference yesterday
The Minority New Patriotic Party (NPP) in Parliament has taken a swipe at President John Mahama for his insatiable appetite for contracting loans, querying the government about the whereabouts of $23 billion contracted as loans in the last six years.
The Minority asked the government to account to Ghanaians what it had used all loans amounting to a whopping $27 billion contracted under the National Democratic Congress (NDC) government in six years, adding that by its calculations, the government had used just $3.42 billion on various development projects across the country and therefore wanted the government to account for the remainder of the money totaling about $23 billion.
“We in the Minority will fight to ensure that the government accounts for every penny of loans contracted in the name of Ghanaians,” Minority Leader Osei Kyei-Mensah-Bonsu said at a press conference in Accra yesterday.
He hinted that the Minority had filed an urgent question in Parliament asking the Minister of Finance to come and give details of how the $27 billion contracted by the government had been expended.
The minority leader pointed out that 94% of increased government expenditure had been for recurrent expenditure, adding that the increase in government debt over the past five years could have been used to build at least 15,000km of asphalted road in the country.
“It is an amount that could have solved Ghana’s energy, water and sanitation problems,” he stressed.
Warning that Ghana might be on the road to HIPC once again, he said the current unbridled borrowing was putting the country at a great risk.
‘As of 2008, Ghana’s total public debt stood at GH¢9.5 billion (33% of GDP). In the last six years, however, the stock of public debt has risen dramatically to GH¢70 billion (60.8% of GDP) as at September 2014. This is an increase in the stock of debt by GH¢60.5 billion or the equivalent of some $27 billion using the average exchange rate for 2009-2014 or $17.5 billion at current exchange rates.
‘This also represents an increase in the stock of debt by 636% over a six-year period (i.e. an average increase in the stock of debt by 106.14% a year). This is a frightening rate of accumulation of debt by any standard or measure. On this track, Ghana is clearly on the way back to the unsustainable debt levels that pushed us to HIPC,’ he warned.
The Minority predicted that the ruling NDC government would definitely present a review of the 2015 budget statement to Parliament in March this year, considering the jaundiced nature of the budget and the unrealistic and missed targets it envisages as a result of the implementation of the International Monetary Fund (IMF)-induced programmes.
“In the 2015 budget statement, there are no visible elements of an underlying agreement on an IMF supported framework. Therefore in all likelihood the nation will see a revised budget statement if a final deal is concluded in 2015,” the Minority said and wondered where funding for the anticipated budget gap would come from.
According to the Minority NPP, 2015 looked very gloomy under President Mahama considering the budget presented to Parliament.
The prediction was part of the press conference on the overview of the 2015 budget and the impact it would have on the economy and Ghanaians in general to mark the second year anniversary of the Sixth Parliament of the Fourth Republic yesterday.
The minority leader, Osei Kyei-Mensah-Bonsu, said the 2015 budget clearly demonstrated that the ruling NDC had created a fiscal mess after six years in government but had no clue on how to deal with it.
He indicated that the government’s main focus in the 2015 budget was on raising enough revenue to hide its fiscal indiscipline but the problem with the economy was expenditure mismanagement and how to effectively deal with it.
“The budget does not address expenditure review and re-composition and measures to ensure fiscal discipline; but rather focuses on raising revenue by piling on more taxes on already suffering Ghanaians,” he said, stressing that this attitude of government clearly showed how insensitive the government was to the plight of Ghanaians.
He noted for instance that just as the 2015 budget was about to be approved by Parliament, the NDC government quickly introduced 17.5% Special Tax on petroleum products and passed it into law using its numbers in Parliament to add more misery to suffering Ghanaians.
He said the 17.5% tax on petroleum would further increase the already high cost of doing business in the country in 2015 while prices of all goods and services would be affected.
He described as a propaganda gimmick the 10% reduction in petroleum products announced by the government on December 31 last year when the price of crude oil on the world market had drastically reduced from about $120 per barrel to below $50 per barrel in the last two years, representing more than 100% reduction in oil prices.
The Minority NPP also noted that despite the substantial increase in oil revenues, capital expenditure as a percentage to Gross Domestic Product (GDP) had been on the decline, moving from 7.1% in 2009 to 5.2% in 2015.
“It is indeed a travesty that Ghana before the discovery of oil was spending a higher proportion of its income on infrastructure investment than after the discovery of oil,” the Minority said.
Talking on the health of the national currency, the Cedi, the Minority said it had been on a downward trend since 2009, recording over 200 per cent depreciation.
‘The cedi depreciated by 17.6% in the first quarter alone in 2014. As at the end of August 2014 the cedi had depreciated by over 75% since December 2013. As we speak now the cedi has made some recovery from GH¢3.85 to $1 to GH¢3.30 and that represents a depreciation of over 50% from the December 2013 level even though we are told that officially it is about 31%. The Bank of Ghana may have to explain to us what the basis of their calculation is. For in December 2013 the exchange rate was GH¢2.20 to US$1 and the 2014 budget projected that the cedi will get to GH¢2.35 to US$1 in December 2014. Today, it is GH¢3.30 to US$1.
‘In the 8-year administration under President Kufuor, the cedi moved from GH¢0.72 to US$1.0 to GH¢1.1 to US$1. Thus the cedi depreciated by 53%. Six years into the NDC administration the cedi has depreciated by 200% and we are still counting,’ Mr Kyei-Mensah-Bonsu noted.
According to the Minority, the economy was completely frozen in 2014 and the short-term prospects of the economy in 2015 were gloomy.
The Minority explained that the agriculture and industry sectors that could propel growth in the economy and provide answers to the unemployment situation saw serious underfunding in the 2015 budget and that could have disastrous implications for the country.
“The ‘Transformational Agenda’ of the 2015 budget statement and economic policy of the government can only be a forlorn hope without any factual and fiscal basis”.
The minority leader said the 2015 budget would not provide any better condition of services for teachers, doctors, nurses, civil servants and workers in general.
By Thomas Fosu Jnr
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