Dr. Edward Kofi Omane Boamah, Former Minister for Communications and Presidential Spokesperson
Accra, Ghana, June 7, 2019//-It is official! Government has borrowed about GHC80 billion in record time, and there is very little to show for this gargantuan addition to the indebtedness.
The debt has risen from GHC122 billion from Independence till 2016; to almost GHC200 billion in 2019.
Yes, in less than three years, President Akufo-Addo’s Government alone is responsible for about 40% of Ghana’s current total debt burden since independence. In effect, whereas the mantra is, “Ghana Beyond Aid,” the real mission is, “Ghana Begging for Aid.”
Obviously, as sad as it is, the Government regardless is blatantly burrowing the pit of borrowing, and if not stopped, it means Ghana’s present and its future is being buried with each passing loan agreement. George Carlin once observed, “I think we ought to just go ahead and make “zillion” a real number. “Gazillion,” It seems to me it’s time to do this.”
Yes! George, you were right in the context of Ghana’s present indebtedness, and I share in your thoughts because twelve years ago (2007), in one fell swoop, Ghana cleaned four zeroes (0000) when she redenominated her currency. But for that singular exercise, your prediction could have come to pass considering the spate of borrowing that we have witnessed in the past two and a half years.
The Hidden Debts
But our debt situation is much higher than the reported figure. Like many Ghanaians, I am concerned about Ghana’s indebtedness because characteristic of all economic indicators, there are limitations; and for national debts which fuel budget deficits, one of such limitations is hidden debts or what Mankiw (2013) terms, “uncounted liabilities.”
For example, hidden debts include pensions which are basically deferred compensations or ‘loans’ which Ghanaian workers have issued to Government with an expectation for their retirement income security.
Indeed, at the 2019 May Day Celebration, various workers bemoaned and warned against Government’s huge indebtedness to their pension funds and also, the attempts to tamper with the CAP30 pension of security services.
Furthermore, another hidden debt is contingent liabilities which arise from Government guarantees such as the:
– Collateralization of the Ghana Education Trust Fund (GETFund);
– GHC2 billion Ghana Amalgamated Trust (GAT) for some collapsed banks;
– Over GHC4.7 billion Energy Sector Bonds; and
– US$600 million Sinohydro facility which is scalable to US$2 billion among others.
Where Is The Money?
Most often when Governments have been confronted with the question, “where is the money?” their default position has been to list specific and tangible programmes and projects to account for what they have borrowed. Also, debt refinancing has been a standard answer. However, in the case of the present administration, there is very little to show for the gargantuan GHC80 billion, which they have borrowed over the past two and a half years.
So, they have often sought to justify their unprecedented consumption related expenditures with the constitutionally stipulated Free Senior High School programme which has visited the “Double Track System” on students and parents. I am not against free S.H.S. How could I a Social Democrat whose tradition superintended over the 1992 Constitution?
But, their mathematics do not add up when one contextualises the total expenditure on Free SHS with the quantum of tax and non-tax revenue which has accumulated under this administration – thanks to John Mahama’s visionary and multi-sectoral ingenuity, including his strategic investments in the hydrocarbon industry.
Examples of such new and additional revenue streams that have come on board since the NPP Government assumed off
ghanawish.com
