The opposition National Democratic Congress (NDC) is urging the Ghanaian electorate to vote out the President Akufo-Addo led New Patriotic Party (NPP) administration over what it describes as the “gross mismanagement of the national economy”.
According to the National Communications Officer of the NDC, Mr Sammy Gyamfi, the NPP has gone back on its 2016 manifesto promise to reduce government borrowing and improve the national debt sustainability position.
He said Ghana’s public debt which stood at GHS120 billion as at December 2016 when the NPP won the elections, Ghana’s debt has since ballooned to GHS258.8 billion in three and a half years under their mismanagement.
“You may recall, that in the run-up to the 2016 general elections, the New Patriotic Party (NPP), led by its over-hyped economic messiah, Dr Alhaji Mahamudu Bawumia and then Candidate Akufo Addo, berated the NDC for what they described as excessive borrowing by the Mahama government,” Mr Gyamfi said at a press briefing on Wednesday.
“The NPP led by Dr Bawumia, described Ghana’s debt position at the time, as unsustainable and went on to describe the country as a “Highly Indebted Lower Middle Income Country (HIMIC)”. This was contained in a Facebook post by Dr Bawumia on 24th March 2015. It was against this backdrop, that the NPP promised at page 13 of their 2016 manifesto, to reduce government borrowing and improve our debt sustainability position when elected. Note that, the promise was not to reduce the rate of borrowing as the NPP is deceitfully claiming today, but rather, to reduce government borrowing. And it was on the basis of this and many other lofty promises, that Ghanaians voted Akufo Addo and the NPP into office.
“It is worthy of note, that at the time the NPP made this promise in the year 2016, our public debt stood at GHS120 billion and our debt to GDP ratio at 55.6% (rebased economic data). But what do we see today? Our Public debt which stood at GHS120 billion as at December 2016, has ballooned to GHS258.8 billion, (i.e as at June 2020). Also, our debt to GDP ratio which stood at 55.6% as at December 2016, has increased to 68.3% and projected by the IMF to hit 76.7% by December this year”.
He said Ghana’s debt to GDP ratio was highly unsustainable and much worse than when the country joined the HIPC debt relief program in the year 2001, adding that President Akufo-Addo has added more to the public debt than any government had done in the history of this country.
“What this means is that, President Akufo Addo has added more debt, i.e. a whopping GHS138 billion and still counting, to Ghana’s Public debt in only three (3) and half years, far more than any government has done in the history of this country, and far more than all successive governments since independence, have cumulatively added to the country’s Public debt. In fact, per our current total Public debt of GHS258.8 billion (i.e. as at June 2020), every Ghanaian in Ghana today is indebted to the tune of about GHS10,000.
“There is no gainsaying the fact that our current debt position (i.e debt to GDP ratio of 76.7%), is highly unsustainable and exceeds the acceptable debt threshold. Indeed, our current debt position, is worse than where we were when we joined the HIPC debt relief program in the year 2001, at which time our debt to GDP ratio stood at 61%. As a matter of fact, our debt position this year, is the worst ever in history of our 4th republican democracy. This has resulted in a situation where over 90% of our domestic revenue is spent on debt servicing. Per the 2020 mid-year budget review statement, domestic revenue from January 2020 to June 2020, stood at GHS21,682,896,236. Of this amount, GHS19,599,639,701, representing 90.4% of domestic revenue, was used for debt servicing alone within this period. What this shows is that, our ever-rising Public debt and its attendant high debt servicing amount (interest payments and amortization), has so deteriorated the country’s fiscal space, such that today, after we service our debts, very little revenue is left and government has to borrow for Compensation, Goods & Services and Capital Expenditure (CAPEX)”.