When it comes to delivering on their economic promises and their Better Ghana Agenda, the popular verdict appears to be that the Mills-Mahama led NDC government is slow.
When it comes to piling up external debt on the other hand, it is clear that the NDC has resumed the ‘Usain Bolt’ borrowing pattern that landed Ghana ignominiously into HIPC.
The lightning speed with which Ghana’s external debt has increased in the first 20 months of the NDC government should be a cause of concern for all, according to Asare Otchere Darko of the Danquah Institute.
According to Mr. Otchere Darko, in just twenty months (by close of September, 2010), the Atta Mills government would have contracted a whopping $3.2 billion dollars in debts, a far cry from the track record of the Kufuor Administration.
Explaining, Mr. Otchere Darko states that at the end of 2000, Ghana’s external debt stock stood at $6.1 billion (158.4% of GDP). Total Debt Service amounted to 24 expenditure and Ghana spent about a quarter of its total export proceeds just to service its debts. The resulting sustainable situation led Ghana adopting the HIPC initiative by the Kufuor government.
By the end of 2008, Ghana’s total external debt amounted to $4,035 million (27 percent of GDP), thanks to debt relief and a relatively prudent borrowing. At the end of 2008 Ghana used less than 5% of its export proceeds to service its external debts.
According to figures from the Bank of Ghana, during the eight-year period under President Kufuor (2001 – 2008), the total amount of external loans contracted by the NPP government amounted to $2.252 billion.
In stark contrast, says Mr. Otchere Darko, by the time Parliament went for recess at the end of last July (extended by one week to August 3 to approve more loans), the NDC, in just under 20 months of its return to office, had added, by the count of the Danquah Institute, an estimated $2.97.0 billion to the international debt they inherited in January 2009.
In fact, this figure leaves out several small loan facilities, says Mr. Otchere Darko.
He goes on to further state that it was announced, happily to Ghanaians on Thursday, September 8 that President Mills will sign a $273 million loan agreement with the EXIM Bank of China when he visits the Republic of China this month.
Thus, by the end of September, the NDC external borrowing portfolio will climb to 3.24 billion! Yes! In the first 20 months in office, the NDC government has contracted more external loans (44% more) than the NPP government did in 8 years!President Mills has quickly and surely overtaken his predecessor in public debt pile-up – the very thing that his government has spent the best part of two years condemning President Kufuor on!”Mr. Otchere Darko states.
Source: The Daily Searchlight/Ghana