Business News of Saturday, 5 August 2017
National Democratic Congress (NDC) Member of Parliament for Cape Coast South, Kweku Rickets Hagan has described the governing New Patriotic Party (NPP) as hypocritical.
He said this in relation to government’s decision to borrow to finance some of its projects within its first six months in office.
According to Mr. Hagan, though the NPP government constantly chided the erstwhile NDC government for constant borrowing, it has resorted to a similar practice.
“There are so many platforms on which the NPP said the money was here which meant they wouldn’t borrow. Dr. Bawumia was the first person to run to jump to a plane in China . Of course he did not find the money here so he had to jump into a plane- this type of hypocrisy.”
Mr. Hagan on Citi FM’s News Analysis Programme, The Big Issue alleged that government had also resorted to couching financial jargons to shroud its constant borrowing in secrecy.
He projected that government would have borrowed about 140 billion by the end of the year if it fails to find other means of generating revenue to fund its projet.
“The problem with this government is that they set for themselves an unrealistic targets…. If the borrowing trend should continue we will have over 140 billion just by the four years that this government will be in office. Even leveraging won’t save the situation.”
Apart from Mr. Hagan other stakeholders have criticized government’s borrowing but officials, in responding to these concerns have said new loans are necessary to retire mature debts the NPP government inherited from the previous administration.
The Deputy Finance Minister who pulled up this defence further explained that government’s decision to borrow more, prevented it from defaulting on its debt payments.
“We are having to measure the rate at which we are trying to reduce the borrowing. We are measure that with the need to expend on certain critical expenditures. When we assumed office, there were people who have been engaged to do things for the state, the contracts have been signed. In the case of vehicles, some have been telling us that have already procured the vehicle and we stand the risk of incurring judgment debts and other obligations if we abrogated these contracts.”
“We’ve met cases where in the last quarter of the year, so many people were engaged, we cannot dismiss them, we need to look at where the law allows us to do that. So we met those commitments. There were also people from who we had taken short term instruments – Treasury bill; there are some which are three months, six months, one year,” he said.