The Member of Parliament for Ajumako-Enyan-Esiam constituency and a former Deputy Minister of Finance, Dr. Cassiel Ato Forson, says the unbridled borrowing of the Akufo-Addo-led government, if not checked, will lead Ghana to rejoin the heavily indebted poor countries (HIPC).
According to him, the country’s debt stock was ballooning yet the government continues to borrow to embark on activities which cannot repay the loans.
For him, “Ghana’s debt sustainability ratio is worrying” and that Parliament ought to set benchmarks to restrain the government from further borrowing.
Dr Ato Forson made the remarks in a presentation he delivered at the National Democratic Congress (NDC) Ranking Members Forum on policy dialogue on Ghana’s economy on Monday, July 26, 2021.
Dr Ato Forson’s presentation looked at Ghana’s debt profile and debt sustainability from the year 2000 – 2020.
According to him, “There is no dispute that the Ghanaian economy is in its worst shape in recent memory.”
He said “at the end of December 2016, interest payment on total public debt was about 150 per cent of capital expenditure.”
That, Dr Ato Forson added, the figure ballooned to over 200 per cent by the end of December 2017, and further to over 300 per cent of capital expenditure in 2018.
He further said at the end of December 2020, interest payment on public debt was 203.59 per cent of capital expenditure, over two times of capital expenditure.
For him, “Ghana is struggling, if all of us we don’t rise up and speak-up, we will suffer together.”
He noted that Ghana has been paying high interest rates on its loans than many countries in the Sub-Saharan Africa since 1992.
He explained that whereas some countries in the developing economies are paying around four and five per cents on their public loans, Ghana was paying nine per cent.