A Member of Parliament’s Finance
Committee, Kwaku Kwarteng has charged government to show how it intends to clear the massive debt it has incurred since assuming the reins of power.
[contextly_sidebar id=”UiqQkzyCsnneC3rjcIDeTAKEPr3A8mBZ”]His call comes on the back of a warning from the Institute of Economic Affairs (IEA) that the government needs to check its borrowing as it may grow up to 70 percent by the end of 2016.
Speaking in an interview with Citi News the Obuasi West Member of Parliament on the ticket of the New Patriotic Party (NPP) insisted that there is a need to stop what he calls reckless spending to save the economy.
Ghana’s public debt
According to the Bank of Ghana, the nation’s public debt level increased from GHC 63.6 billion to GHC 65.7 billion in 2014 .
“If we were borrowing and spending well, we will be making the necessary inflows and to pay back some of the loans. The real issue is that we are borrowing so much [and] we are having to pay so much by way of interest payments and yet the economy into which we are supposedly borrowing so much is not generating enough money to do even some of the basic things we have to do,” he indicated.
Mr Kwarteng explained that the economy is in distress hence the need for government to find alternatives ways of funding its expenditure.
He said instead of planning and utilizing available resources to fix the economy “government chose to do more borrowing” instead.
The Minority Leader in Parliament, Osei Kyei Mensah Bonsu had stated that Ghana could return to the Highly Indebted Poor Country(HIPC) regime if government continues to secure more loans from foreign institutions.
Borrowing not solution
He further called on government to “demonstrate clearly how it intends to take this country out of the fiscal hole we find ourselves,” while advising government that “this borrowing is not a solution,” to salvage the Ghana’s economy.
Minister“If we continue like this we are going to get to a point where people will just not lend to us and when that time comes we will see how much damage we have done our economy and our country by reckless management of the economy.”
In a related development, Dr. Mahamudu Bawumia, running-mate for the New Patriotic Party’s (NPP) presidential candidate, Nana Akufo Addo had observed that Ghana risks being classified as a country with a high risk of debt distress by International rating agencies because of the continuous borrowing.
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By: Godwin Allotey Akweiteh/citifmonline.com/Ghana