Business News of Tuesday, 1 August 2017
A former Deputy Finance Minister has projected a national debt figure under the current administration that will far exceed the previous administration’s figure after four years.
Kweku Ricketts-Hagan believes if the current borrowing pattern under the Nana Akufo-Addo’s administration continues, Ghana’s debt stock in 2020 will exceed 2016 figures by at least GH¢18 billion.
“Since they came to office, the debt that they inherited, 122 billion, is now GH¢137 billion. Which means that in the in the six months that they have been in office, they have borrowed GH¢15 billion, which translates to GH¢3 billion a month.
“Therefore, if this pattern continues, in 12 months this government would have borrowed GH¢36 billion. If they continue for the four years that they will be in office, they would have borrowed GH¢140 billion. That would be more than the 122 billion that we left them with,” he said, comparing the performance of the former National Democratic Congress (NDC)-led administration’s debt profile to the current one led by the New Patriotic Party (NPP).
He suggests that the country could be plunged into a dangerous national debt situation, with total debt stock exceeding GH¢200 billion under the Nana Akufo-Addo administration by 2020, if the current borrowing does not pay off existing debts.
The former Deputy Finance Minister made the comments Monday on PM Express on the Joy News channel (Multi TV) during a discussion on the mid-year budget review presented to Parliament by Finance Minister, Ken Ofori-Atta.
Presenting the mid-year budget review, the Finance Minister revealed that Ghana’s debt stock increased from GH¢9.5 billion at the end of 2008 to GH¢122.3 billion at the end of 2016 – an increase of debt stock by 1,154%.
Mr Ken Ofori-Atta said the debt servicing payments arising from Ghana’s accumulated amounts to some 45 percent of total domestic revenue.
“Unfortunately, our economy would have to live with this burden for some time as we make efforts to repair the damage. The revised 2016 nominal GDP of GH¢167.3billion, puts the public debt-to-GDP ratio at 73.1 percent of GDP against the 72.5 percent reported in the 2017 Budget presented to this House earlier in March this year,” the Minister said.
However, speaking on PM Express, Kweku Ricketts-Hagan said the Finance Minister was only giving excuses for the country’s worsening debt situation even though the NPP promised not to add to the debt stock during the 2016 electioneering campaign.
“This is a government who said they won’t borrow; this a government who said they can find revenue. When we were there, we never said we wouldn’t borrow…They said the money is here they won’t borrow. They came and they have realised that that is not the situation,” he criticised.
However, a Member of Parliament’s Finance Committee and MP for Bantama, George Aboagye, who was also on the show, fended off the attack on the current administration by Mr Ricketts-Hagan. He said the President Akufo-Addo-led administration has an elaborate plan to undo the “mess” caused by the NDC.