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Business News of Saturday, 31 March 2018


Accruing GHC28.6b debt in one year worrying - Adongo to government

Member of Parliament for Bolgatanga Central, Isaac Adongo is accusing government of “dizzy incompetence” in what he calls indiscipline in government’s borrowing trends with nothing to show for it.

Speaking on the floor of Parliament last week Friday, covered by, he claimed that Ghana’s economy has taken a backward turn and is in a reverse gear with Ghana’s debt to GDP ratio at an alarming 74%.

According to him, the Akufo-Addo government with Ken Ofori-Attah as Finance Minister has failed in the raising of revenue leading them to rely heavily on borrowing, adding a whooping 28.6 billion cedis to Ghana’s public debt under just one year.

“Rt Hon Speaker, I rise to support the motion for the Minister of Finance to borrow an amount of approximately 2.billion… One billion to support the budget and about 1.6 billion for liabilities management”, he began.

“My worry is that this government is creating rising debt and Ghana is suffering from high rising debt and we are worried this will create problems for this country”, he said.

Quoting a research from IFS, he said the debt to GDP ratio was alarming and at 74%, it was worrying, noting that government has nothing to show for its borrowing.

“My question is, this means that we have added about 28.6 billion to Ghana’s public debt in one year and yet I have not seen a borehole being constructed anywhere. I have not seen a school being built”, he pointed out.

He noted that going onto the market to borrow is not so much of a problem than how government is managing its books and raising revenue.

Mr Adongo was not optimistic.

“Unfortunately, we are running a fiscal regime that is regressive, one that reduces VAT for airline tickets to support the rich, and imposes import tax on bicycles for the poor”, he said on the floor of the house.

“We are running a fiscal regime that reduces taxes on real estate sales, but imposes an import VAT on people who import concrete mixers for masons to make their money.”, he added.

Mr Adongo has been a critique of this government right from its first day in office.

Last year, he said the statistics available at the end of the first half of the year showed that Ghana’s economy was in reverse gear, adding that “an economy that grew by 6.3 percent without oil has now grown by 3.9 percent the same period without oil.”

“From Nkrumah, through Acheampong, Rawlings and Kufuor, no government has incurred this level of budget deficit. The crux of the problem is that government spending in 2012 increased astronomically to 34.5% of GDP, even though government revenues amounted to 16.1% of GDP (a gap of over 100%) for the year. The government abandoned all fiscal discipline in an attempt to win the 2012 elections.” He had charged.