Deputy Finance Minister, Casel Ato Forson, has described as mischievous and very dangerous a deliberate attempt by NPP’s Vice Presidential candidate to misrepresent facts about Ghana’s debt stock.
He said the subjective analysis by Dr Mahamudu Bawumia, who is now leading the party’s 2016 campaign, is intended to mislead unsuspecting Ghanaians to score cheap political points.
Mr Forson said he is particularly worried because the agenda by NPP and Dr. Bawumia who was once a Deputy Governor of the Central Bank can affect Ghana’s image.
Last month, the NPP Flagbearer who presented what he called the “True State of the Nation Address” said, “Government has increased the debt stock from 9.5 billion cedis in 2008 to some 99 billion cedis currently. In dollar terms the NDC government has therefore borrowed some US$37 billion in 7 years.”
Nana Akufo-Addo in his recent statement said the Mahama Administration has borrowed five times the total amount borrowed by Ghana’s first President Osagyefo Dr. Kwame Nkrumah and former President John Kufuor.
On Monday President John Mahama set the record straight in an interview with Bridget Otoo of TV3. He spoke about the over exaggeration by the NPP and maintained that the current debt stock is about 24 billion dollars. He said, “does it make mathematical sense” for anyone to say that the NDC government borrowed 37 billion dollars in 7 years when the total debt stock since President Nkrumah stands at 24 million dollars?
Indeed, these are the facts in the 2016 budget presented to Parliament by Finance Minister, Seth Tekper. Paragraphs 126 to 128 read: “Mr. Speaker, the public debt stock stood at 69.12 percent of GDP as at the end of September, 2015 from 70.15 percent of GDP in December, 2014.
“On nominal basis, the provisional debt stock as at September, 2015, stood at GH¢92,161.84 million (US$24,285.07). This is made up of GH¢54,488.26 million (US$14,357.91million) for external debt and GH¢37,673.58 million ($9,927.16 million) for domestic debt.
“Mr. Speaker, on a monthly basis, the developments in the provisional public debt as a percent of GDP has moved in line with exchange rate developments for the period. The budget statement, which is available online gives further details about the economy and steps to reduce deficit”.
The document, which has been debated and approved by Parliament for now, is the only credible source about Ghana’s finances.
The NPP Vice Presidential candidate who is on a tour of the Volta Region has not given up. He told students of the Jasikan College of Education as he put it that President Mahama does not know how much the NDC has borrowed and needs more briefing.
Deputy Finance Minister, Casel Ato Forson is not taking Dr. Bawumia’s agenda lightly and has issued a sharp response challenging him to bring proof. Mr Forson who spoke on Accra based radio stations Joy FM and Okay FM said Ghana’s total debt as of December 2015 is 97, 239.62 million cedis. In nominal terms the projected GDP is 140 billion cedis. This puts the debt-to GDP ratio at 69.45 percent.
Ato Forson also disclosed that the fiscal deficit, which stood at 10.2 percent in 2014, dropped to 7.1percent in 2015 and is expected to go down further to 5.3 percent by December 2016.
He expressed surprise at the palpable lies by Dr. Bawumia and described as an intellectual dishonesty his failure to inform his audience the role the HIPC relief played in his argument regarding a reduction in the debt stock from 6.1 billion in 2001 to 3.8 billion in 2008.
While the debate continues there are critical issues that need to be considered. Ghanaians of course wish governments borrow prudently. Positive signs of major infrastructure projects like new roads completed or under construction, major interchange projects like the Nkrumah Circle in Accra, Sofoline in Kumasi and what has begun in Kasoa, hospital expansion projects, the hundreds of millions pumped into the energy sector which have relatively resolved the energy crisis, schools and several other initiatives were obviously funded from loans.
The US$1 billion Atuabo Gas Project for example has capacity to produce and supply 150 million standard cubic feet of gas per day to the VRA for electricity generation. It helps VRA produce some 660 MW of electricity and the Plant is self-financing, produces 540 tons of LPG per day (about 60% of the current national demand of 240,000 tons/year).
Besides the Port expansion projects, Sanglemi Housing project which is near completion and similar ones across the country, the Kotoka, Kumasi and Tamale Airport expansion projects, the Ho Aerodrome, the Komenda Sugar Factory, are just but few massive projects.
These obviously have long-term benefits, which will either save Ghana money or attract the badly needed investments. Donor support to our yearly budgets has been slashed because Ghana is now a lower middle-income country. Government must work. It has the option to raise revenue through taxes.