New Patriotic Party\u2019s (NPP) running mate for the 2016 elections, Dr. Mahamoud Bawumia, has chastised government\u2019s continuous borrowing warning that the country\u2019s debt in dollar terms, would reach as much as $42 billion dollars by the end of December 2016.<\/p>\n
Speaking at a lecture titled, \u2018The State of the Ghanaian Economy \u2013 A Foundation of Concrete or Straw\u2019, chaired by Former President John Agyekum Kufuor, Dr. Bawumia among others accused government of failing to put to good use the huge loans it has contracted.<\/p>\n
[contextly_sidebar id=”pujk3WGQfPcc5KjJOJTWvNl9I8UiESS4″]\u201cBy the end of 2008 following the adoption and implementation of the HIPC initiative, the government\u2019s policy framework of fiscal discipline, the country\u2019s debt to GDP ratio, had declined from 189% in 2000, to 32% of GDP by 2008. Indeed from independence in 1957 to 2008, Ghana\u2019s total debt was 9.5% Billion Cedis; however; in the last seven years alone under this NDC government, Ghana\u2019s total debt has ballooned from 99.5 billion cedis to 100 billion cedis in 2015; and a 105 billion cedis by May 2016. In fact, 66% of Ghana\u2019s debt from independence; has been accumulated under the presidency of John Mahama in just the last three and half years.\u201d<\/p>\n
Dr. Bawumia, who has constantly lambasted the government\u2019s excessive borrowing explained that, \u201cin terms of the of the dollar equivalent of the borrowed amount, this government has borrowed some 39 billion dollars in eight years. When I mention this, they either get confused or pretend to get confused; so for the sake of clarity, I have put in this document a table that shows them clearly the dollar equivalence of all the amounts borrowed from 2009 to 2016. In fact by December 2016, the government would have borrowed $42 billion dollars. The government would claim no doubt, that the book value of the debt is $26 billion dollars; but quite frankly that\u2019s a weak argument. The only reason why the book value of the debt is $26 billion is because we are applying today\u2019s exchange rate which the same government succeed in collapsing to the value of the debt; and not the exchange rate at the time the money was borrowed. With this major increase in the debt, Ghana\u2019s debt to GDP ratio has increased from 32% in 2008, to 72% at the end of 2015.\u201d<\/p>\n
Finance Minister lied about Ghana\u2019s GDP ratio – Bawumia<\/strong><\/p>\n Dr. Bawumia accused the Finance Minister Seth Terkper of massaging debt to GDP ratio figures during his presentation of supplementary budget in July this year.<\/p>\n “Interestingly, in the presentation of the supplementary budget in July 2016, the Minister of Finance stated that Ghana\u2019s debt to GDP ratio had declined from 72% in 2015 to 63%. Unfortunately and sadly this is untrue. The calculation of the debt to GDP ratio used by the Minister is just playing wrong and misleading. The government has taken the total debt stock in May 2016, and divided it by the projected GDP in December 2016, to arise at the debt to GDP ratio is 63%. This is statistical gimmickry. If you ask the Minister about how he achieved this dramatic reduction in the debt to GDP ratio in either January or May 2016, he will be unable to tell you. All that has happened is that, he has used a higher projected GDP number to do the calculation.\u201d<\/p>\n Dr. Bawumia said such excessive borrowing and the subsequent mismanagement of the economy, is to blame for the increasing levels of unemployment.<\/p>\n According to him, \u00a0the amount borrowed by the NDC administration since 2009, does not commensurate with the government’s claim of massive infrastructure development. According to the economist,\u00a0the total cost of infrastructure from loans, grants and taxes from 2009 to date, is less than 7 billion dollars.<\/p>\n He thus questioned what the rest of the money has been used for. \u00a0“So where\u2019s the rest of the money?” he asked.<\/p>\n According to Dr. Bawumia, a large chunk of the money has been wasted through over-bloating of project cost and corruption.<\/p>\n Dr. Bawumia also outlined government\u2019s failures in the management of interest rates and its impact on businesses and the banking sector, the energy sector among others.<\/p>\n –
\nBy: Ebenezer Afanyi Dadzie\/citifmonline.com\/Ghana
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