The Finance Minister’s Mid-Year statement to Parliament last week put the country’s provisional debt at 90 billion cedis. But a press conference by the Minority NPP today said what the government stated does not reflect the true picture of the country's debt profile.
The group believes the public debt should be in excess of 90 billion because the government has gone for more loans after that figure was put out.
The Minority mentioned the $1.5 billion eurobond approved for issue by Parliament as well as some 300 million cedis loan agreements which he said were yet to be added to the debt profile.
Using government’s own figure of 90 billion, Dr. Anthony Akoko who spoke for his colleagues noted that each Ghanaian owes 3,600 cedis.
Mr. Benjamin Kpodo told Joy News the Minority was being disingenuous when they lumped every loan as public debt without taking into consideration those invested in projects that would generate revenue to pay for the loans.
He cited for instance the Ghana National Gas Company and the Kumasi Central Market which is expected to generate at least 60% of the investment on its own.
In his assessment, the country is on a positive path when one subtracts Ghana’s total asset from the total debt.
The country’s total assets have been valued at 133 billion cedis, according to the Member of Parliament’s statistics. This means with an estimated 25,000,000 citizens, each Ghanaian would be worth 5,320 as opposed to the 3,600 debt.
He said if Ghana’s borrowing was rampant and dangerous as the Minority perceived, bonds issued by the country would not be oversubscribed by investors. This is an indication that Ghana “has so much credibility” within the international community.
So issues bothering on Ghana’s debt should be “put into proper prospective” to get the right picture, Mr. Kpodo cautioned.
He conceded that some of the loans contracted were used to pay wages and pay off maturing debts, projects such as schools cannot be considered as bad investments.
Nonetheless, Dr. Anthony Akoto Osei told Joy News the government is doing what it knows best, “shifting the goal post” when it suits it, stressing, “government borrowing is public debt period”.
He demanded how much the state is making from the Ghana National Gas Company which the MP touted as a self-paying project.
“When you inherit a debt stock of 9.5 billion in 2009 and you move it up to 90 billion in six and half years, you have to be careful,” he warned.
Finance Minister Seth Terkper adding to the debate said it is not accurate that the current debt to GDP would be 70%.
At the current exchange rate where the cedi is holding its own against the dollar, debt to GDP should be less than 70%, he explained.
He urged commentators to rather assess whether measures put in place by the government to salvage the economy are sustainable.
Dr. Godfred Bokping, Head of Finance at the University of Ghana Business School, said Ghanaians should be concerned about the country’s debt sustainability.
He was worried that the economy is not growing to generate the cash flow to service the country’s debt, but was confident that with the IMF programme, the country debt would be checked from heading into a dangerous zone.