The rising debt profile, has been generating concern, despite assurances by the nation’s economic managers that there is no cause for alarm.
The debt to Gross Domestic Product (GDP) ratio, is about 70 percent, which is becoming unsustainable.
We have borrowed over the years to fund consumption expenditure, as well as pay salaries. The country in 2001 was declared as a Highly Indebted Poor Country (HIPC).
According to World Bank parameters, if a country’s debt-to-GDP ratio crosses the 70percent debt mark, the country is classified as Highly Indebted Country (HIC).
The public debt has ballooned to GHS 154 billion (excluding the Energy Bond of GHS 4.7 Billion) as of May, 2018, from GHS 122 billion in January, 2017.
Ironically, we are told by the government that, the economy that, they are borrowing to service maturing debt.
The government has developed the penchant for borrowing, the little money that is collected by way of taxes and levies are being dissipated with reckless abundance.
On a daily basis, we are confronted with one allegation of corruption or another; the monies involved are sometimes mind blowing.
The cost of projects are inflated, to make sure everyone in the process, gets a bite at the booty. Taxes have been increased beyond imaginable levels and new ones introduced, yet we cannot even build toilet, without borrowing.
Every infrastructure in this country, from roads, hospitals, to schools are built with borrowed money. The new animal is Public Private Partnership (PPP).
The government, has announced floating a 50billion dollars century bond. How well have we done with the bonds we have floated already.
In 2017, the Government issued a Bond worth GHS2.2 billion to Ghana Commercial Bank (GCB) in respect of its assumption of the collapse of UT and Capital Banks. This has added to the public debt and will be borne by the poor tax payer.
The rising debt profile, could actually scare foreign portfolio investors away from the nation’s economy because it can crash the value of the local currency, a situation that portfolio investors will not like to be part of
The purpose of the country’s current borrowings is good on paper, but the budgetary process has been frustrating the roll out of infrastructure for which the government had been taking loans. It is the view of this newspaper that the government must not be profligate with regard to the management of its debt resources.
We think that Ghanaians, should begin to question the efficiency of borrowing by the government, whether it is the present government or former administrations.