Business News of Sunday, 18 November 2018
Former Finance Minister, Seth Terkper, has rejected the current Minister, Ken Ofori-Atta’s description of the economy as inaccurate.
According to him, the “hand-to-mouth” portrayal of Ghana’s economy during the 2019 budget presentation last Thursday is more of a reference of the governing New Patriotic Party (NPP) style of administration.
“We never lived hand-to-mouth to mouth as a policy. I hope that that reference was to NPP’s preference for administration in the last two years. [National Democratic Congress administration] had a balanced approach, which boosted investment.
“I remember when we were talking about investment, the mantra was ‘we don’t eat road, we don’t eat buildings’,” he said on Newsfile on Joy FM/MultiTV Saturday.
While presenting the 2019 budget statement to Parliament, Mr Ofori-Atta justified his intention to lead the country to subscribe to the rare Century Bond in the coming year, stating that the ultra-long-term bond is important to finance massive economic transformation plans next year.
He said these landmark economic transformation require a more ambitious financing arrangement and the capacity to retire about half of the country’s debts secured under a high-interest rate environment during the previous administration.
“If we really want to uplift ourselves out of this hand-to-mouth existence and put our country Ghana on a firm trajectory of growth and prosperity, we will need to source long-term affordable financing to invest in strategic infrastructure over the medium to long-term,” Mr Ofori-Atta told Parliament.
However, commenting on Newsfile, Mr. Terkper said the NDC administration had a sound policy on debt, borrowing and investment; not one characterised by only revenue mobilisation and spending – which explains the hand-to-mouth description.
“We had a sound debt management policy out of the Petroleum Revenue Management Act and a prime example is that we were able to take off Ghana’s first sovereign bond without default.
“With the oil revenue, we created the Ghana Infrastructure Fund; the evidence is Terminal 3, so we balanced revenue with expenditure as well as debt management with investment. So I think it is clear for everyone to see,” he clarified.
Meanwhile, Mr Ofori-Atta said Thursday that the Ghana Century bond program will help provide the economy with the means to refinance expensive liabilities.
“It is an important bulwark for Ghana’s post-IMF status; it indicates a country with a long-term plan, a country that can program its infrastructure needs, a country that can provide for adequate foreign exchange reserves,” he stated.