Opposition parliamentarians have decried the ballooning national public debt, describing the situation as dangerous and unsustainable.
Speaking at the NDC Ranking Members Forum on the Policy Dialogue on the Economy, Monday, July 26, 2021, former Deputy Finance Minister, Cassiel Ato Forson said the insatiable borrowing of the current administration has resulted in an unprecedented debt to GDP figures.
According to him, the Nana Akufo-Addo administration has added 60% of all the country’s total debt to GDP figure since it took over the reins of government.
“President Akufo-Addo’s first time, he has increased Ghana’s debt to GDP in dollar terms by 50%. In fact, if you are to look at it from the cedi perspective, then it means that President Akufo-Addo’s government added 50% of today’s Ghana’s public debt. In fact, if you use today, it would be worse.
“As of 31st December 2020, public debt that we had from Kwame Nkrumah to date, since Adam, President Akufo-Addo’s government alone, added 60% of Ghana’s public debt,†he said.
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He said Ghana’s economy is currently in the worst shape ever.
According to him, while borrowing is inescapable the current administration is borrowing to consume instead of spending to capital expenditure.
“This has resulted in intense hardships arising from mounting taxes, and rampant increases in prices of goods and services leading to an elevated cost of living. The main causes of the current hardships are the twin problems of the largest budget deficit (15.2%) in recent history and a choking debt overhang that threatens the stability of the Ghanaian economy.
“Attempts have been made by the Akufo-Addo/Bawumia government to shift blame for this to the COVID pandemic but I will demonstrate shortly through a data-based presentation that the hardships arising out of the deficit and debt situation is the direct result of mismanagement of the economy and misplaced populism by this government,†he added.
The event was attended by the leadership of the NDC in Parliament, representatives of the governing NPP, economists and other members of the academia.
Meanwhile, new data released by the Bank of Ghana show that Ghana’s total public debt stock has increased once again.
The debt stock which ended the first quarter of 2021 at GH¢ 304.6 billion, increased by almost GH¢ 30 billion in April and May, according to the data by the central bank. This saw Ghana’s total public debt as of the end of May 2021 rising to GH¢ 332.4.
The new debt figure brings Ghana’s debt to Gross Domestic Product (GDP) ratio to 76.6% as of the end of May.
This is the highest recorded so far in the past year, slightly higher than the debt to GDP ratio of 76.1% recorded at the end of 2020 according to data from the central bank.
A breakdown of the debt numbers shows that the component of the debt secured outside the country after remaining relatively stable in the first quarter rose significantly by about GH¢ 20 billion from GH¢ 141 billion at the end of March 2021 to GH¢ 161.5 billion at the end of May this year.