Public Debt Stock: Gov't Massage Figures To Deceive Investors—Minority

The Minority Caucus in Parliament has accused the Akufo-Addo's economic management team of massaging figures of the country public debts stock just to deceive potential investors that there is resilience economy.

According to the Minority, the Akufo Addo led New Patriotic Party government has bloated the nation’s debt stock from GH¢122 billion to GH¢173 billion, yet nothing tangible to justify.

The Minority made the accusation after Parliament has approved the Annual Public Debt Report for the 2018 Financial Year on Wednesday, June 19, 2019.

The Debt was approved after a heated debate between the Majority and Minority members on the floor of the House as to the actual figures of debts of the country.

Whilst the Minority are accusing the government of riding the nation with unproductive debts, the Majority side praised the government’s economic management team for resilience economic management for the past two and half year.

Mr Isaac Adongo, MP for Bolgatanga Central accused the government of ballooning the county public debt to what he termed "unsustainable catastrophic levels."

According to him, the debt- GDP-ratio in 2016, which is 55.6 per cent, was far better than the 2018 debt- GDP-ratio, which stood at 57.9 per cent, stressing that the Government is trying to massage the country’s public debt figures to look good in order to deceive public, especially investors.

The Minority maintained that government has bloated the nation’s debt from GH¢122 billion to GH¢173 billion as at December 2018, and has gone beyond GHC 80 billion as at April 2019.

Mr Cassiel Ato Forson, Ranking Member on Finance, expressed worry about the country growing public debt and feared Ghana's may suffer in the future to service its debts.

He claimed, a recent World Bank and IMF research showed the country’s debts sustainability would be a problem, adding that, the situation may get worse as country’s external debts are also increasing without any sign of the ability to pay as nothing is being done to mobilize revenue enough to service the debts.

But Dr Mark Assibey-Yeboah, Chairman of the Finance Committee, who presented the Committee’s report, stated that the aim of government’s debt management was to ensure that government’s meet the financing needs timely at the lowest cost consistent with a prudent degree of risk.

He said the Medium Term Debt Management Strategy (MTDS) by the government was to bring the public debt level to below 65 per cent of GDP over the medium term.

According to Dr Asibey Yeboah, the MTDS in 2018, was able to finance the budget deficit with domestic securities using long-term bonds, external financing and with the International Capital Market (ICM).

He further told parliament the report was to help outline and give further and better particulars "on government borrowed and other debt management operations, guarantee and lending activities of government and other financial arrangements entered into by government for the year 2018."

The New Juaben South lawmaker noted that the Annual Debt Report was to also disseminate information on the country public debt portfolio and debt related issues undertaken over the past years, which includes lenders and investors of government securities and the public.

The Majority claimed in 2018 the government successfully issued a US$2 billion Eurobond, which was the sixth time the country had participated in the International Capital Market.

The Eurobond, the majority argued consisted of US$1 billion 10-year bond and landmark 30-year bond of the same amount priced at 7.625 per cent and 8.625 per cent respectively, describing it as relatively lower interest rates achieved in spite the global capital market turbulence triggered by increasing interest rates, currency crisis, among other economic issues.

Contributing to the debate, Minister of Information, Kojo Oppong Nkrumah, contended that the rate of debt accumulation has been brought down to 14.5 per cent in 2018 as against 22 per cent in 2016 under the NDC administration.

He discredited the Minority claims that Ghana’s debts stock has reached an epidemic level and maintained that the figures from the report did not support the minority arguments.

The Information Minister pointed out that Ghana’s debts position was healthier, and the nation would continue with the current debt management strategy.

The Majority chastised the erstwhile NDC administration for their reckless spending, which led them to the IMF for policy credibility.

They claim that despite the government’s expenditure in the Implementation of the Free SHS Policy and other social intervention policies, it had still been able to bring down the deficit to 3.9 per cent.