Dr Mahamudu Bawumia, the New Patriotic Party’s running mate for the 2016 elections, has scolded government’s continuous borrowing warning that the country’s debt in dollar terms, would reach as much as $42 billion in December.
Speaking at a public lecture in Accra titled, ‘The State of the Ghanaian Economy – A Foundation of Concrete or Straw’, Dr Bawumia among others accused government of failing to put to good use the huge loans it has contracted.
“In fact, 66 per cent of Ghana’s debt from independence; has been accumulated under the presidency of John Mahama in just the last three and half years.”
“By the end of 2008 following the adoption and implementation of the HIPC initiative, the government’s policy framework of fiscal discipline, the country’s debt to GDP ratio, had declined from 189 per cent in 2000, to 32 per cent of GDP by 2008’’, he said.
Dr Bawumia, who has constantly castigated the government’s excessive borrowing said, “in terms of the of the dollar equivalent of the borrowed amount, this government has borrowed some $39 billion in eight years.
“When I mention this, they either get confused or pretend to get confused; so for the sake of clarity, I have put in this document a table that shows them clearly the dollar equivalence of all the amounts borrowed from 2009 to 2016, in fact by December 2016, the government would have borrowed $42 billion.”
“The government would claim no doubt, that the book value of the debt is $26 billion; but quite frankly that is a weak argument’’.
“The only reason why the book value of the debt is $26 billion is because we are applying today’s exchange rate which the same government succeed in collapsing to the value of the debt; and not the exchange rate at the time the money was borrowed. With this major increase in the debt, Ghana’s debt to GDP ratio has increased from 32 per cent in 2008, to 72 per cent at the end of 2015.”
Dr Bawumia at the lecture chaired by Former President John Agyekum Kufuor, said such excessive borrowing and the subsequent mismanagement of the economy, is to blame for the increasing levels of unemployment.
He also criticised the standard of living of Ghanaians under the Mahama-led administration.
He said not only is the inequality gap between the rich and the poor increasing, the poor are getting poorer.