An Economist has dismissed the erstwhile NDC administration’s oft-repeated assertion that it borrowed to finance key infrastructural projects.
According to a Senior Research Fellow at the Institute for Fiscal Studies (IFS), Dr Said Boakye, it was about time the opposition NDC stopped that claim because the figures do not support it.
“You see the reasons why you were borrowing is not because of infrastructure, it is not because of projects. If the borrowing [was] directed towards infrastructure, you will be seeing it in GDP because building infrastructure directly reflects in GDP before its repercussive effect,” he told an NDC MP on Newsfile, Saturday.
During a discussion on the highlights of Thursday’s budget presentation by the Finance Minister, Ken Ofori-Atta, on the Joy FM/Multi TV news analysis programme, NDC MP for Bolgatanga Central, Albert Adongo, suggested that funds borrowed by the previous government were used to finance infrastructure projects.
While it was power, the NDC had proffered a similar defence any time it was accused of piling up the country’s debt stock with numerous domestic and foreign loans.
The matter had popped up again for discussion on the Newsfile programme following revelations by the Finance Minister that the previous government had saddled the economy with over GHȻ10 billion in avoidable debts.
In a bid to suggest to the NDC legislator on the show that an attempt to justify the excessive borrowing under President John Mahama would be an exercise in futility, Dr Said Boakye said the available records on investment suggests that the borrowing was not channelled into developmental projects.
“If borrowing is for infrastructure, you are going to see it in investment expenditure in the budget, but what are we seeing, it [investment] is declining despite borrowing.
“The truth is that the serious borrowing that [was] done [was] not for infrastructure,” he said.
Backing Dr Boakye’s position, a Senior Economics Lecturer at the University of Ghana and a Fellow of the Institute of Economic Affairs (IEA) said if the claim that the borrowing was channelled into investment, it would have reflected in the assessment of credible credit rating about the country.
“If you read IMF and all those credit rating agencies’ report, they have often said a chunk of our borrowing has gone into consumption,” said Dr Eric Osei-Assibey.
In his defence, Mr Adongo reminded the panellists that infrastructure investments took some time to reflect in metrics such as GDP.