Govt Borrows $27bn – Bawumia Insists

Dr. Bawumia delivering his address.
The New Patriotic Party (NPP) vice presidential candidate, Dr. Mahamudu Bawumia, has said it is sad that the current National Democratic Congress (NDC) government seems not to even know how much it has borrowed since it assumed office in 2009, describing the situation as the height of economic mismanagement.

Speaking to students at the Navrongo campus of the University of Development Studies on Saturday, Dr. Bawumia said it was understandable why the government had mismanaged the mindboggling resources it had borrowed since it does not seem to even know the value of how much it had borrowed.

Challenging the government’s claim that it had borrowed only $17 billion and not $27 billion, Dr. Bawumia said: ‘Unfortunately, the government is claiming that it has only borrowed the equivalent of some $17 billion and not $27 billion. It is very sad for the government to fail to admit the obvious truth in this regard. If as a government you actually do not know how much you have borrowed, then your competence must be under serious questioning. As at September last year Ghana’s total debt was about GH¢70 billion.

‘You must know the value of how much you actually borrowed if you are to manage it properly. If you claim you have borrowed five dollars when you have actually borrowed 10 dollars, then you would have a problem in managing the money to build the returns needed to repay the 10 dollars.’

Dr Bawumia mobbed by the students after the program

Speaking on the reckless borrowing spree by the government since it assumed office, Dr. Bawumia went further to explain to the students why the government was so wrong in its claim that it had borrowed only $17 billion.

‘Let me explain to you the untruthfulness in the government’s argument in a simple example. Assume that today the exchange rate of the cedi to the dollar is 1:1, if you borrow GH¢100 today, it will mean that you have borrowed the equivalent of $100 and you should be able to do projects worth $100. If in a few years the exchange rate depreciates to three cedis to one dollar, then the 100 cedis you borrowed a few years ago would be worth some $33. This does not, however, mean that you did not borrow the equivalent of a $100 initially; and we should expect to see a $100 worth of projects. You cannot suddenly claim that you actually borrowed $33 a few years ago and so you are only to account for $33 worth of projects. Using current exchange rates in determining the equivalent amount borrowed is misleading because it ignores the value of the debt at the time it was borrowed,’ Nana Akufo-Addo’s running mate for the 2016 elections underscored.

Dr. Bawumia stated that with this in mind, Ghanaians expect to see $27 billion in projects since that is the value of the debt accrued in the last six years.

The NPP vice presidential candidate noted that if the government had managed the huge sums of money borrowed competently, just a minute fraction of that money could have solved Ghana’s energy problems totally, and that the mismanagement of the huge resources by the government over the last six years is the only reason why Ghana is currently in the mess it finds itself – with the country virtually broke.

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