New Patriotic Party (NPP) Vice Presidential candidate Dr Mahamudu Bawumia says it should have been possible for the current National Democratic Congress (NDC) government to build at least 1,142 Komenda-like factories across the country, if it had properly and honestly managed Ghana’s resources well.
Dr Bawumia therefore wondered why the government seems to be bragging over one of these factories, Komenda Sugar Factory.
The NPP Vice Presidential Candidate made these comments at the International Young Democrat Union (IYDU) Freedom Forum 2016 currently ongoing in Accra on Thursday.
Speaking on the topic “Tackling Africa’s high unemployment rate, a challenge for the New Africa”, Dr. Bawumia noted that a proper management of resources devoid of corruption is one of the critical necessities for creating jobs and the right environment for business in Africa and narrowed down to Ghana as a good example of a nation which has had abundant resources in the past few years but failed to witness the transformation necessary.
“When you look at Africa, the problem often is not a lack of resources, it is the management of resources. I want to give you an example because we are in Ghana. Between independence and 2008, the total debt of Ghana was GH¢ 9.5 billion (about $8billion then), now the current government has been on a borrowing spree and has increased this debt from GH¢ 9.5 billion to GH¢111 billion by March. Now if you look at the money that has been borrowed in dollar terms, at the time of borrowing, it is currently around $40billion; this is the value of the money that has been borrowed,” Dr. Bawumia said.
Before proceeding to touch on the number of factories the borrowing could have built, Dr. Bawumia recounted the NDC’s denials on the actual value of the monies they have borrowed and wondered how any government can properly manage funds when it does not even know the value of money it has borrowed.
“Of course, because of the exchange rate depreciation, the actual amount owed is less than the value that has been borrowed, but when I mention it, this government doesn’t seem to understand that you can borrow an amount of $X but because of exchange rate depreciation, you actually owe less at the end of the day because if the exchange rate is GH¢1 to 1$ and I borrow GH¢100, then it’s $100 I’ve borrowed, but if it depreciates to GH¢10 to $1, then that GH¢100 I’ve borrowed now will be $10 on the books. But it doesn’t mean that I didn’t borrow GH¢100 to start with. So, when I say to the government that they’ve borrowed the equivalent of $40billion, they will tell me I am wrong because they are using the current exchange rate, and, therefore, they’ve only borrowed about $10.
“So, if you cannot even understand how much money you have borrowed, how can you manage the money? I mean you don’t have a sense of how much money you have borrowed, how can you manage it?” Dr Bawumia quizzed and added: “It’s mindboggling but these are the people managing our economy and if you cannot understand simple facts like these, how do you go to the more complicated act of creating jobs?”
Dr. Bawumia was of the view that with such unprecedented borrowing, the last thing the government should be doing is bragging about setting up one factory since the $40billion the government has taken could have built 1,142 of such factories.
“Our government was beating its chest a few weeks ago that it had established a sugar factory for 35million meanwhile you have borrowed some $40 billion, you could have established 1,142 of such factories but after borrowing $40 billion, you are now trying to beat your chest for establishing a factory for $35 million,” he added.
Dr Bawumia stated: “When you spend $40billion in any African economy, you should see transformation, you shouldn’t have a water problem, you shouldn’t have an energy problem and you shouldn’t have a manufacturing problem. You have to deploy the resources adequately to solve problems and for the benefit of the economy.”
The Freedom Forum 2016 is the first time the IYDU is holding the annual event in Africa.
Former President John Agyekum Kufuor and Presidential Candidate of the New Patriotic Party, Nana Akufo-Addo are expected to both address the Forum before it ends on Saturday.