Huge debt under NPP has pushed Ghana’s economy to HIPC levels – NDC

The opposition National Democratic Congress (NDC) has said while the Highly Independent Poor Country (HIPC) programme has ended, Ghana’s current debt situation is similar to the time when the country joined the programme.

Communications Officer, Sammy Gyamfi, said at a press conference on Wednesday, October 28, 2020, that President Nana Addo Dankwa Akufo-Addo has supervised the degeneration of Ghana’s economy back to the same unsustainable debt position when Ghana joined the HIPC programme some 19 years ago.

“Our current debt position, that is a debt-to-GDP ratio of 76.7%, is highly unsustainable and exceeds the acceptable debt threshold.

“Indeed, our current debt position is worse than where we were when we joined the HIPC debt relief program in the year 2001, at which time our debt to GDP ratio stood at 61%,” he said when he addressed journalists at the party's headquarters.

He said the debt situation has resulted in over 90% of Ghana’s domestic revenue being spent on debt servicing.

“Per the 2020 mid-year budget review statement, domestic revenue from January 2020 to June 2020, stood at GHS21,682,896,236. Of this amount, GHS19,599,639,701, representing 90.4% of domestic revenue, was used for debt servicing alone within this period.

“What this shows is that our ever-rising public debt and its attendant high debt servicing amount – interest payments and amortization – has so deteriorated the country’s fiscal space, such that today, after we service our debts, very little revenue is left and the government has to borrow for Compensation, Goods & Services and Capital Expenditure (CAPEX),” he said.

The presidential candidate of the opposition NDC, John Dramani Mahama, was criticised for saying that Ghana has been declared a HIPC country, prompting suggestions he was spreading untruths.

Government spokespersons have said Mr Mahama goofed when he made that comment because the HIPC programme has ended.

But defending his party’s flagbearer, Sammy Gyamfi said what John Mahama meant to say was that Ghana’s debt situation was the same as when the country entered the HIPC programme due to mounting debts.