Politics

Budget: NPP has better records in debt mg’t than NDC – Oppong Nkrumah

Information Minister Kojo Oppong Nkrumah has said that the Akufo-Ado administration has better records in the management of public sector debt than what the National Democratic Congress (NDC) did.

He indicated that the debt figures and statistics do not favour the main opposition party.

Speaking to TV3 ahead of the 2022 budget presentation on Wednesday November 17, the Ofoase Ayirebi lawmaker indicated that when the NPP administration took over in 2017, several measures including the enactment of the Fiscal Responsibility Act, were put in place to check government spending.

“There are rules about borrowing that we ourselves have come to parliament  to put in place  that borrowing need not to be zero  but it should not be more than 5 per cent of GDP, that is what we call the Fiscal Responsibility Act.

This portrayed a government that was willing to ensure fiscal discipline, he added.

“Because of Covid we have had to suspend it  and we are now around 10 per cent of GDP , you will see in this budget  the fiscal part coming back  down. We are bringing it down to about  7.9 per cent. In the next budget may be about 6 per cent and we will bring it back to 5 per cent.

“It is evident that we are reducing the rate of debt accumulation, it is evident that we are reducing the deficit of 11 to about 5. If you look at the  cedi denominated debt stock, I keep telling my colleagues, you will be misled because if the exchange rate  is one cedi one dollar, if you owe hundred dollars , it is hundred million cedis. If the exchange rate changes to 1.5, you don’t need to borrow more , the next morning the same hundred  million dollars  is now hundred and fifty  million cedis . So if you see that it was 100million cedis is now  150 million cedis , you have more than fifty million cedis and that, show me what you have done with it.

“That fifty million changed in a cedi  denominated debt stock. It is not as a result of borrowing. That is why all over the world  they use debt to GPD ratio , they use deficit , they use other debt sustainability  indicators  and that is what we are encouraging  that we should also now watch  those ones and see  because for the cedi denominated debt  stock  it can very much misleading . Even for that those who want to do politics with we can compare their about 9 billion cedis that the NDC inherited  to the about 124billion  that they left.  And compare the 124 billion of the NPP  to the about 300 billion that  we have now and strike the percentage and see who will be ore  responsible when it comes to  debt. But that kind of nominal comparison  wont get us anywhere. Even if we choose to play that game we will play it better  than our colleagues on the other side  but that kind of game wont get us anywhere.”

Former President John Dramani Mahama recently said that Ghana’s current debt situation was exposing the country to very high risk of debt default.

He indicated that the debt has ballooned to unsustainable levels- topping 80% of Gross Domestic Product (GDP) owing to the mismanagement of the economy by the government.

“Our debt has ballooned to unsustainable levels- topping 80% of GDP- exposing us to very high risk of debt default. Almost all of our tax revenue is used to service our debt and the effect has been the introduction of several new taxes.

“This has led to rampant increments in the prices of goods and services. This is primarily responsible for the hardships Ghanaians are going through now.

“This government must accept that it is their mismanagement of the economy, their thirst for consumption expenditure and the desire to spend beyond our means in order to win elections that have plunged us into the current crisis, not necessarily COVID-19.”

3 news.com

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