Picture of national debt not wholly true - Nana Akomea

Accra, March 4, GNA - Government on Thursday said the picture of the national debt as painted by Professor John Atta Mills, Flag bearer of National Democratic Congress (NDC), was incorrect.

It said the claim that Ghana's external debt was now 76 trillion cedis was on the higher side and must be discounted.

Addressing the Weekly Meet-The-Press in Accra, Nana Akomea said the assertion that the national debt had increased from 41 trillion cedis to 76 trillion cedis; representing an increase of 35 trillion cedis during the three years of the NPP government was "not the whole picture."

Nana Akomea said at the end of 2000, Ghana's external debt was nominally 5.8 billion dollars, going up to 6.5 billion dollars at the end of 2003. This represented a 700 million-dollar increase over a three-year period.

He said out of the 700 million-dollar increase 237 million dollars were additional loans negotiated and contracted by the NDC government before 2001, but which had not yet been disbursed.

Nana Akomea noted that strictly, additional loans contracted after 2001 amounted to 463 million dollars as at the end of last year. On domestic debt, the figure stood at 9.5 billion cedis at the end of 2000 and after taking over TOR and GNPC debts (2.4 billion cedis) among other parastatal debts, the figure jumped to 14.2 billion cedis. He said at an inter-bank average inter-bank cedi/dollar exchange of 5,307 cedis for 2000, the external debt for 2000 translated into 30.79 trillion cedis.

"Adding the 9.5 trillion domestic debt brings the total debt at end of 2000 to 40.29 trillion cedis," adding that, " while for the period after 2000, an inter-bank average cedi dollar 8,826 put the external debt of 6.5 billion dollars translates into 57.3 trillion cedis"

"When you add the domestic debt of 14.2 trillion cedis brings the total national debt at the end of 2003 to 71.5 trillion cedis."

Nana Akomea explained that the external debt was always affected by the nominal value of the cedi/ dollar exchange rate, saying, in dollar terms, it was 6.5 billion dollars and 57.3 trillion in cedi terms. He said if the exchange rate changed, though the dollar value would be the same, the cedi value would be changed as the cedi/dollar rate changed. Hence it was not very useful to use the cedi presentation of the external debt.

Nana Akomea said he did not like the fact that the NDC was using the same methods it (NDC) spoke against when the NPP government took office in 2000.

He noted that what was crucial was the management of the cedi/dollar exchange rate.

"Applying the rate of 5,307 a dollar in 2000, the external debt of 5.8 billion dollars translates into 30.79 trillion cedis."

He said in three years from 2001 to 2003, the cedi moved from 7,200cedis to the dollar to 9,200 to the dollar. The cumulative depreciation for the last three years was 22 per cent as against the 84 per cent in the last three years of the NDC administration. Nana Akomea admitted, "it was not very useful to denominate our external debt in cedis ...".

He told Prof Mills and the NDC that the 2004 elections would be very free and fair, adding that there had been six successful bye-elections since 2001.

Government, he noted, had accepted all the 2004 election proposals, and budget of the Electoral Commission (EC), and was keen to contribute its share of resources to enable the E.C. to discharge its duties. He said President John Kufuor on corruption at the recent NPP Congress at Cape Coast did not indicate what kind of situations he regarded as temptations.

"But it cannot be that the President said people bring him, bribes, he pinches himself to be able to resist the bribe, and asks the bribe giver to go and bring the bribe next time. That is an improbable interpretation."

On Alhaji Bamba's case, Nana Akomea said the case involved the presentation of a dud cheque that was being investigated and prosecuted by the Bank involved in the transaction.

The second, he noted, was the forgery of signatures on letterheads of the Office of the President.

"This matter is under Police C.I.D investigations and the man mentioned in the reports in the meantime has resigned. But his resignation is without prejudice to any ongoing or further investigations."

He said he (Nana Akomea) had requested for a copy of the recording on Alhaji Bamba's case from the Chronicle newspaper, saying as soon as it was done, the appropriate offices would review it and take the necessary action.