General News of Friday, 27 September 2013
Source: Daily Graphic
The Minority in Parliament yesterday painted a gloomy picture of the economy and indicated that there was now a consensus, even within government, that the economic situation had deteriorated into a complete crisis.
"Our debts are rising alarmingly. From a total public debt of GH¢9.5 billion in January, 2009, Ghana's public debt stands at GH¢43.9 billion (49.5 per cent of GDP) at the end of August," it said.
Addressing a press conference yesterday, the Minority Spokesperson on Finance, Dr Anthony Akoto Osei, stated that between December, 2012 and August, 2013, the government added GH¢8.8 billion to the country’s public debt.
He said that situation meant that the government was borrowing at a rate of GH¢1.1 billion per month, adding that "this is not just unsustainable, it is also unreasonable".
Dr Akoto Osei said with that huge appetite for borrowing from the domestic market, it was grossly absurd and disingenuous for the government to blame banks for high lending rates to businesses and individuals.
He said in spite of the excessive borrowing from both the domestic and the international markets, the NDC government could still not meet its statutory obligations.
Dr Akoto Osei explained that for 2013, the government had not honoured its statutory obligations as far as the District Assemblies Common Fund (DACF), the National Health Insurance Fund (NHIF), the Ghana Education Trust Fund (GETFund) and the Road Fund were concerned.
He indicated that since January, this year, the DACF was in arrears of GH¢652 million, while the NHIF and the Road Fund were in arrears of GH¢350 million and GH¢400 million respectively.
"So not only is government borrowing excessively without telling us what they are using the money for, government cannot account for taxes paid by you and I for the purpose of delivering social services and, therefore, statutory payments into these accounts are not being paid".
Dr Akoto Osei said district assemblies were the hardest hit, pointing out that the insensitivity to the plight of assemblies had resulted in the non-payment of utility bills and cited the cutting off of power to the Kumasi Metropolitan Assembly by the ECG to buttress his point.
He added that about two weeks ago, several government cheques bounced at the local government level because the accounts on which the cheques were to be drawn had been quietly closed upon the instruction of the government.
Dr Akoto Osei said the irony was that while the government had failed to meet its statutory and constitutional obligations, it continued to make payments on non-statutory obligations to its cronies.
He said when the government took the Eurobond recently, Ghanaians were told that part of the amount would be used to settle amounts due contractors, adding that even though the entire amount had been received alright, to date the contractors had not been paid.
Dr Akoto Osei questioned why the government could not make statutory payments with all the many loans contracted, with all the donor grants, Eurobond money and CBD loan disbursed and with all the tax hikes.
"The painful fact is that a government that engages in so much indiscipline and recklessness in its expenditure pattern in an election year as the Mahama government did in 2012,will certainly reap bad harvest. This is the crisis confronting Ghana's economy today," he stated.