“Your mid-year budget presents nothing but gloomy economy” – Minority to gov’t

Members of the opposition National Democratic Congress (NDC) in Parliament has given the Nana Addo led government a strong warning to change its lazy way of running the economy.

According to them the Bawumia led economic management team’s claim that the country’s worsening economic situation is as a result of the ‘Take-or-pay’ contracts signed by the John Mahama led government with some power producers.

Addressing the media in Accra, the Ranking Member on the Finance Committee of Parliament, Mr. Cassiel Ato Forson explained that the constant deteriorating of economy is due to the expenditure pressures emanating from the increase in the wage bill through the appointment of lager number of political operatives by President and debt service cost resulting from reckless and excessive borrowing.

“Government’s own public finance statistics, Ghana’s wage bill and debt service cost as at the end of first quarter of 2019, stood at about 93 percent of total revenue and grants and is projected to reach 95 percent by the time the midyear budget”  he emphasized.

On accumulation of arrears from the non-settlement of government indebtedness to contractors, the Ranking Member on the Finance Committee of Parliament hinted that their projection, based on government’s own fiscal data, shows that if the trend continues, the accumulation of arrears alone will reach 30 percent of  GDP (Ghc100 billion).

He further explained that the predominance of government’s expenditure on consumption for the first quarter of 2019, expenditure on goods and services constituted about 17.5 percent of total revenue and grants while domestically financed capital expenditure was just about five percent of total revenue and grants.

According to them they were not surprised to note from the Finance Minister’s mid-year presentation on the floor of the House that Ghana’s public debt has risen sharply from Ghc120 billion as of December, 2016 to a whooping Ghc204 billion as of June, 2019 representing an increase of about Ghc84 billion in the last two and half years under President Akufo Addo.

Due to the recklessness and blatant disregard for financial management by the Akufo Addo led government, Ghana’s debt to GDP ratio is 59.2 percent from 55.6 percent in December, 2016 even with the benefit of a rebased economy. Mr. Ato Forson added.

“It is projected that based on government’s incessant appetite for borrowing and the current trend, Ghana’s public debt will reach Ghc220 billion by the close of the 2019 fiscal year, representing about 62 percent of GDP. This would mean that in three years, President Akufo Addo would have added Ghc100 billion to the public debt. We wish to stress that this only represents what has been added since 2017. ” The Ranking Member indicated.

Mr. Ato Forson who doubles as the Member of Parliament (MP) for Ajumako-Enyan-Essiam Constituency in the Central Region, revealed that in less than four years, under President Akufo Addo, the public debt would exceed the projected Ghc220 billion, once draw-down begins for a number of loans approved by Parliament.

“The populist policies adopted by President Akufo Addo have come full cycle and are throwing all the gains made from the fiscal consolidation prior to the coming into office of the NPP government, out of gear. It has become obvious that the NPP has no intention of keeping their promises to Ghanaians when it comes to borrowing and the public debt, the imposition taxes, fuel price adjustments and the resolution of the general hardships facing the people” he said.

This rapid increase in the public debt level, he maintained means that the country has reached a point of debt unsustainability, a fact confirmed by the World Bank Country Director. “This Mid-year budget clearly showed that the public finances are in dire straits and the resort to additional tax measures is an indication of the troubling times that we are in” he added.

“The mid-year budget presented by the Finance Minister only offers gloom and portend very difficult times for all Ghanaians. There is, therefore, the need for the Akufo-Addo government to change course or they will plunge the economy into much bigger challenges,” the Ajumako-Enyan-Essiam lawmaker said.

 

Story: Franklin ASARE-DONKOH

Writer’s email: franklin.asare-donkor@todaygh.com

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