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11.06.2019 General News

I'll Protect The Public Purse: Akufo-Addo Gov't Exhibits Double Standard Over Debt Stock—Minority

I'll Protect The Public Purse: Akufo-Addo Gov't Exhibits Double Standard Over Debt Stock—Minority
JUN 11, 2019 GENERAL NEWS

The Minority caucus of Parliament has accused President Akufo Addo led New Patriotic Party (NPP) of being a hypocritical and double standard on the national debt stock.

According to the Minority, the government kept on shifting the blame on Mahama administration when it comes to debts but quick to take credit for projects from funds borrow to build such projects that accrued such debts.

They insisted, the Mahama government left behind a public sector debt of GHS120 billion and not GHS122 billion as claimed by the current government.

The Ranking Member on the Finance Committee of Parliament, Casiel Ato Forson told Journalists at a press conference on Tuesday, 11 June 2019 that the government is not being transparent as they used the 2017 exchange rate to calculate the debt incurred in 2016.

He described it as a smack of unfairness to the good people of Ghana and the previous National Democratic Congress(NDC) government.

The Minority praised the central bank for capturing the right figures on its website which help expose the government double standard on debts as the Ministry of Finance deliberately refused to capture same.

“The NPP is out there saying that the NDC left a public debt of GHS122 billion. In fact, that is not true. It is not true because the actual debt the NDC left behind was GHS120 billion,” Ato Forson said.

The Minority mentioned the Tema-Akosombo Railway line, the Pokuasi Interchange, the Kumasi Airport phase two, among of other ongoing projects under the current administration which funds were procured through loans by the NDC.

Read full statement:

PRESIDENT AKUFO-ADDO MUST STOP THE SOPHISTRY AND ACCOUNT FOR THE GHS 200 BILLION HE HAS RECEIVED

1. Last week, the Minority Caucus in Parliament drew attention to the alarming and reckless borrowing of President Akufo-Addo since assuming office. We reminded Ghanaians about the deceptive NPP chorus and pledge led by the then duo, the Flagbearer and Running Mate, not to borrow under any circumstances when elected to power.

2. Using Government of Ghana and other state data sources, we showed that in addition to increasing the public debt by GHS 80 billion from GHS 122 billion in 2016 to GHS 200 billion in 2019, President Akufo-Addo had received about GHS 120 billion in both tax and non-tax revenue. We also wish to remind Ghanaians that the GHS122 billion includes the deceptive GHS2 billion on account of using End-March 2017 instead of End-December 2016 exchange rate and the administration has been the beneficiary of 2 additional oil and gas fields that have almost tripled output at higher global prices. We gave the following breakdown for these resource inflows; Total tax revenue (2017 to 2019)-GHS 113.5 billion; Total oil revenue (2017 to 2019)- GHS 12.3 billion; Total grants (2017 to 2019)- GHS 3.7 billion; Total addition to public debt (2017 to 2019 first quarter)- GHS 80 billion; Total amount of resources available to President Akufo-Addo since 2017- GHS 209.5 billion.

3. We also showed in our press briefing last week, that this figure does not include some other borrowing hidden under various guises as follows: $750 million or GHS 3.9 billion in Commercial loans; $200 million or GHS 1.4 billion GoG guaranteed GNPC loans $1.5 billion or GHS 7.8 billion GETFUND loans; GHS5.7 billion ESLA Bonds.

4. This should add GHS 18.8 billion to the debt stock and represent additional resources received by President Akufo-Addo.

5. In addition, there are liabilities that will arise from the SynoHydro loan, additional CDB loan, proposed Century Bond, collateralization of mineral royalties, and guarantees to GAT and other beneficiaries of the banking sector restriction (Which loans are cited without ESLA).

6. We demanded at the briefing that President Akufo-Addo accounts for what he has used all these borrowed funds for as very little evidence existed for their use. We also contrasted this dismal performance with the tangible output of President Mahama who made unprecedented investments across all sectors of our national life.

7. In response to our request, President Akufo-Addo rolled out his Information (Chief Propaganda) Minister (on the trails of VEEP), Kojo Oppong Nkrumah, who at a media encounter last week, failed to give the much-needed account of what had been done with all these resources. Instead, he sought to deny the obvious truth, that his boss the President, had added GHS 80 billion to our debt stock as of the end of the first quarter of the 2019 fiscal year. The Information Minister also attributed the huge addition to our public debt to exchange rate depreciation.

8. Two things are clear from the President's responses as conveyed by his Information Minister.

a) First, his claim that they have not added GHS 80 billion to the public debt stock smacks off duplicity and dishonesty. For the avoidance of doubt, we have been very generous in sticking to official numbers and NOT applying the outrageous principles and calculations used by the Vice President and other NPP stalwarts when they were in opposition, to assess the debt, GDP and other economic numbers. To challenge that calculation which merely subtracts the 2016 debt figure from the current debt figure is to question the President's own integrity and that of his Vice President. Hence, unless the Information Minister wishes to say that then-candidate Akufo-Addo and Dr Bawumia were not even outlandish in peddling falsehood about our debt in opposition, we are unable to appreciate exactly why he has resorted to this claim.

b) Second, the attempt to blame the rising debt on exchange rate depreciation represents "double-speak" and an admission of failure by President Akufo-Addo since it is his duty to ensure a stable exchange rate and his failure to do so cannot be used as justification for a ballooning public debt. We wish to remind the hon. Minister that the Bond proceeds and other loans have not resolved the problem of the cedi, as promised only weeks ago.

9. President Akufo-Addo has also remained tight-lipped on what exactly the monies have been used for and his Information Minister could not point to any except to claim that development wasn't all about infrastructure. This could be another justification for using the oil revenues for consumption. This latest claim also runs contrary to the NPP's position as articulated by Dr Bawumia to the effect that the then NDC government was borrowing to finance consumption (which he knew was palpably false). Dr Bawumia condemned this and described it as reckless borrowing.

10. The effect of Dr Bawumia's claim then was that prudent borrowing meant pumping funds borrowed at high-interest rates into capital expenditure and not consumption. At the time that he made this claim, the NDC under Preşident Mahama had made the biggest investments in education, health, energy, roads, transport, communications, water, housing among others.

11, It is obviouş that in the absence of any significant or tangible investments despite receiving more resources that other governments, President Akufo-Addo wants to make excuses and go back on the very things he and his party said in opposition about borrowing.

12. In another breadth, some government functionaries, including the Information Minister, has also claimed that the borrowed funds have gone into government initiatives such as Free SHS, Planting for Foods and Jobs, One District, One Factory, One Village, One Dam, One million dollars per Constituency among others.

13.We wish to remind the Minister that his Government had boasted about raising domestic revenues, not loans or use of oil revenues, to fund these initiatives. A careful analysis of the Government of Ghana fiscal data shows that only a fraction of the resources available to President Akufo-Addo has gone to finance these slogans many of which have been so poorly executed or remain unfulfilled.

14. For instance, in the three budget statements presented so far by the Akufo-Addo government, only a total of GHS 4.254 billion was allocated for domestically financed Capital Expenditure (less ABFA) and many of the NPP campaign slogans such as one village one dam, one district one factory and one million dollars per constituency would fall under this.

15. The fiscal deficit is also presented as consolidating fast. Is the confusion being presented by the Hon Minister the truth that a lot more expenditure and arrears are being dealt with outside the official fiscal framework, including the SSNIT and NPRA arrears that the President claimed was owing?

16. The same budget statements also show that the total amount spent on Free SHS since 2017 adds up to only about GHS 3 billion. Teacher and Nursing training allowances paid so far adds up to GHS GHS 1 billion.

17.Assuming that all allocated funds were even released, the total amount of money spent on all the programmes highlighted above is less than the total oil revenue received between 2017 and 2019.

18. This shows clearly that President Akufo-Addo cannot hide behind expenditure on his campaign slogan to explain away the unprecedented resources available to him. He must tell us what the remaining GHS 190 billion has been used for.

19. Sophistry, duplicity and plain propaganda will not explain away the truth that he has underperformed despite benefiting from more resource inflows than his predecessors. The Information Minister also claimed that the public debt has shot up because of loans contracted by the NDC government which are currently being disbursed. We challenge him to produce a list of all such loans and show clearly, how much has been disbursed. The government cannot eat its cake and have it: take credit for the projects and disown the loans. It should be humble to give the credit to former President Mahama!!! The information we provided is about new loans, not disbursements

20.Another often trumpeted claim is that monies borrowed have been used to pay debt left by the NDC. This claim is most misleading and has been deliberately couched to throw the dust into the eyes of unsuspecting members of the public. The reality is that monies borrowed to replace shorter-dated maturing debt do not have any impact on the public debt figure. The figure remains the same as there is no net increase.

publication of all expenditure undertaken with the borrowed funds and all the resources received by President Akufo-Addo. Sophistry, propaganda and lack of candour cannot explain the fact that President Akufo-Addo has had trie resources and yet has the least to show of all the Presidents of the fourth republic.

Thank you.

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