The Ranking Member on Parliament’s Finance Committee, Dr. Cassiel Ato Forson, says the Akufo-Addo/Bawumia-led government is responsible for 60% of Ghana’s total debt stock.
Speaking at a Policy Dialogue organized by the Minority in Parliament at the University of Professional Studies, Accra, Dr. Forson, said out of Ghana’s Public debt of GHS291 billion as of December 2020, President Akufo-Addo’s tenure accounts for GHS171.22 billion representing 60%.
He said the completion point of the HIPC initiative brought total debt relief of GHS 5.5 billion which reduced President Agyekum Kufuor‘s end-period debt to a little over GHS800 while President’s Atta Mills and Mahama added GHS 26.2 billion and GHS 84 billion respectively.
The current debt position he explained placed the country on an unsustainable trajectory requiring urgent measures to address.
Dr. Forson, who is also the Member of Parliament for the Ajumako Enyan Essiam constituency, cautioned that unless far-reaching measures are introduced to stem the current tide, Ghana could default on its debt service obligations and fall deeper into economic crisis.
The ranking member explained that government’s “reckless borrowing is to blame for the economic failures that have led to an unprecedented 15.2% deficit and an asphyxiating debt overhang”.
According to Dr. Ato Forson, desperate efforts by the Akufo-Addo-Bawumia administration to blame “COVID-19 for its self-inflicted mismanagement are simply excuses to escape responsibility for its failures.”
“A careful analysis of key debt sustainability indicators provides ample evidence that, prior to COVID-19 (i.e. before March 2020) Ghana’s public debt was on an unsustainable trajectory.”
He said the hardships Ghanaians face are the direct consequences of mismanagement of the economy and populism of the administration by the government.
Using extensive Government-issued data to back his assertion at a press conference on Monday, July 26, 2021, Dr. Forson said beyond more than doubling the inherited debt from independence from GHS120 billion to over GHS291 billion in its first term, the Akufo-Addo administration worsened Ghana’s debt to GDP ratio by hiking it from 56% in 2016 to 76.8% by end of the year 2020.
“This was against the fact that the NPP in opposition faulted the NDC for operating at 56%, which was below the recommended threshold of 70%. The Akufo-Addo administration also worsened Ghana’s ability to repay its debt. At the end of 2020, Ghana’s Total Public Debt was more than five times its Domestic revenue”, Dr Forson noted.
Ghana’s debt stock hits GH¢332 billion, debt to GDP now 76.6%
Ghana’s total public debt stock which ended the first quarter of 2021 at GH¢ 304.6 billion, increased by almost GH¢30 billion in April and May.
This saw Ghana’s total public debt as of the end of May 2021 rising to GH¢ 332.4.
The new debt figure brings Ghana’s debt to Gross Domestic Product (GDP) ratio to 76.6% as of the end of May.
This is the highest recorded so far in the past year, slightly higher than the debt to GDP ratio of 76.1% recorded at the end of 2020 according to data from the central bank.