Prime News Ghana

Ghana's rate of borrowing is worrying - Economist

By Justice Kofi Bimpeh
Dr Lord Mensah
Dr Lord Mensah
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Economist and Financial Analyst, Lord Mensah says the country's rate of borrowing is worrying.

Lord Mensah said monies borrowed by the government have not been properly invested into assets that will generate significant revenue to close the financing gap. 

He explained that if the country's debt is growing and the revenue base is also growing then we don't have much problem but as it stands the revenue base is slow and we are increasing the country's debt.

"The rate at which we are going is a cause to worry because if your debt is growing and your revenue base is also growing then you don't have much problem but in this country, our revenue base is more or less slow and at the end of the day we are increasing our debt so it tells you that possibly the debt is not invested in assets that can generate revenue for the country effectively is a cause to worry."

READ ALSO :  Economists urge fiscal prudence to tame debt surge due to Covid-19

 Currently, the country's debt stands at about 255 billion cedis as of the end of June 133 billion cedis higher than the total debt stock of 122 billion cedis as at the end of 2016. 

The country will also borrow an amount of 22.7 billion cedis within the next three months beginning this month with about 3 billion cedis being fresh borrowing.

Ranking member on Parliament's Finance Committee, Cassiel Ato Forson, after the mid-year budget review said the continuous borrowing by government will not only increase the public debt but hurt the economy.

 Mr. Forson said the government has failed in the management of the economy.

“It is clear this government has spent GH₵11.1bn on coronavirus without accounting for it. It is also clear that they have increased the public debt from GH₵120bn to GH₵255bn, and they are going to spend an additional GH₵30bn to increase the public debt to approximately GH₵280bn. Clearly, they have failed,” he said.

He further alleged that despite the loans government has taken, it cannot account for the utilisation of the funds.

Mr. Forson, who doubles as the Member of Parliament for Ajumako-Enyan-Esiam constituency, also described the budget review as a document of “manifesto promises”.

This, according to him, is unacceptable since the Akufo-Addo administration has consistently failed the people of Ghana.

“There is nothing in this document for us to be proud of. And we in the minority want to serve notice that from Monday we are ready to debate this and subject it to the scrutiny that it deserves.”