Why Nana Disclosed GH¢122BN debt … Kwaku Kwarteng says lying about economy could have dire consequences

By Emmanuel Akli
The Member of Parliament (MP) for Obuasi West, Mr. Kwaku Kwarteng, has noted that it would have been a dangerous path to thread, if President Nana Addo Dankwa Akufo-Addo had hidden the true state of the Ghanaian economy from investors during his State of Nation Address.

Such a decision, he observed, would have dire consequences on the economy, if investors get to know about the true picture, hence the President's decision to lay bare the status of the national economy.

According to him, it is true that Ghana's total debt (both domestic and international) currently stands at GH¢122 billion.

It is equally true that, when Kufuor's government was exiting office in 2009, the country's total debt stood at GH¢9.5 billion, and that if the GH¢9.5 billion figure was deducted from the GH¢122 billion, the rest would be debt incurred by the immediate-past government alone.

Analysing the State of Nation Address on Joy FM's News File programme on Saturday, Kwaku Kwarteng contended that the figures put out by President Akufo-Addo were facts, and that if the opposition National Democratic Congress (NDC) did not agree, they must point out the errors, instead of condemning the entire statement.

He noted that if the NDC had wanted to tell the true state of the economy, President Mahama, during his last State of the Nation address, would have provided the figures, but regrettably, he was mute over the issue.

The Obuasi West MP further pointed out that the expenditures of the immediate past NDC government were far in excess of the revenue generated by the state. And to correct this imbalance, they resorted to excessive borrowing, and also indulging in over-taxation, which was crippling business entities in the country.

When the then government ran to the International Monetary Fund (IMF) for succor, it also failed to meet almost all the targets set by the Breton Woods Institution.

This, Kwaku Kwarteng continued, was evidenced in the going down of inflation without the corresponding reduction in the interest rate.

According to him, the development imposed a heavy burden on businesses in the country, and that it was on the basis of all these challenges that the Nana Addo's government had decided to overhaul the economy, by cutting down on taxes to give a breathing space to Ghanaian businessmen and women.

He also hinted that the government intend to redirect some of the taxes, and also cut back some of the unnecessary expenditures, to raise funds to tackle problems confronting other sectors of the economy.

A former Deputy Minister of Finance, Kweku Ricketts-Hagan, who was also on the programme, argued that the deduction of GH¢9.5 billion, which debt NPP claimed they left behind in 2009, from the current GH¢122 billion debt by President Akufo-Addo, and arriving at the conclusion that 92% of the current debt was incurred by the NDC government, was wrong.

He contended that the President was wrong in using the 2009 exchange rate to calculate the dollar indexed debt they incurred.

According to the former Deputy Minister, who is also the MP for Cape Coast South, the debt incurred by the NPP was serviced by the Mahama administration, but the payment to the creditors was not based on the exchange rate of 2009, when the loans were secured, but based on the current prevailing exchange rate of the cedi to the dollar.

Kweku Hagan further told his listeners and viewers that he was not contesting the figures released by President Akufo-Addo in his State of the Nation Address, but was concerned about his decision to simply deduct the GH¢9.5 billion from the current GH¢122 billion, and coming to the conclusion that they incurred less debt when President Kufuor took over the reins of power, adding that the debt incurred in 2009 cannot be the same figure today.

According to him, if the current exchange rate is used to calculate the GH¢9.5 billion debt left behind by NPP in 2009, they would have contributed GH¢32.21 billion out of the current GH¢122 billion national debt stock.

He further stated that when this GH¢32.21 billion is deducted from the GH¢122 billion, the NDC government, led by President Mahama, would have also contributed or incurred a little over 70% of the debt, and not the 92% quoted by President Akufo-Addo during his State of the Nation Address.

Kwaku Kwarteng, however, came back to argue that it was not the intention of the President to tell Ghanaians who caused what, but to tell the true picture that would elicit public debate. According to him, our debt profile had gone beyond GH¢100 billion mark, which is affecting the ordinary Ghanaian, through joblessness.

The incoming Deputy Minister noted that though the NDC government claimed to have managed the economy well, economic activities in the national economy has gone to its lowest ebb in 23 years, and that this is the reality facing Ghanaians, and Nana Addo wanted a debate on that.