National Communications Officer of the National Democratic Congress (NDC) Sammy Gyamfi has noted that at the time the New Patriotic Party (NPP) failed to honour its promises of reducing government borrowing and improve the debt sustainability position.
He said at a press conference in Accra on We4dnesday October 28 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%.
“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.
He added “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).
“So bad is our current debt position that our finance minister, Ken Ofori Atta, at the virtual plenary session of the Development Committee (DC) of the World Bank (WB) and International Monetary Fund (IMF) last Friday, pleaded for debt forgiveness for the country. ”
By Laud Nartey|3news.com|Ghana