Ghana’s total debt stands at $13.4b

Government on Wednesday said Ghana’s total debt as of May 2011 was $13.4 billion and the national debt at the end of the 2008 Financial Year was $8.1 billion.

A statement signed by Deputy Minister of Information, Mr Samuel Okudzeto Ablakwa in Accra therefore described as “yet another disappointing lie” claims that the country’s debt portfolio had doubled within two years.

According to him, the President Mills’ Administration unlike the NPP had demonstrated that funds borrowed and which would be paid for by the State must be used for worthwhile projects that would benefit the people and whose repayment would not cripple the economy and the people.

“The debt to GDP ratio stands at about 35 per cent. This ratio demonstrates that the nation’s debt is well within sustainable range, thanks to the prudent management of the economy by President Mills’ Economic Management Team.”

“It is that prudence that has achieved for Ghana within two years the macro-economic feats that the NPP struggled to achieve in vain for eight long years,” the statement noted.

“As a social democratic party, the NDC has always held the view that it is not about how much you borrow, but the projects for which you borrow and the efficient utilization of the borrowed funds,” the statement explained.

Government, it noted, had over the last two years concentrated on infrastructure expansion in the areas of health care, education, roads, and energy.

“This, it says, is a far cry from the recent past when expensive facilities, notably the $750 million Eurobond, were not used for any major infrastructure work to bring about a significant infrastructural boost to the economy,” the statement added.

“For a facility that was so expensive to pay back at 8.5 per cent per annum with a 10-year payback time, the NPP used the $750 million to procure prepaid meters, locomotives when rail tracks had not been constructed, Ashanti Goldfields Corporation (AGC) shares and payment of salaries.”

“This unfortunate misapplication of expensive debt resulted from the NPP Government’s inability to ensure the readiness of critical feasibility studies for projected infrastructural projects before securing the facilities,” it said.

The statement in addition noted that for Ghana to grow at the expected rate, she needed to expand and improve her infrastructure for which there was the need for increased financing.

“Government will, therefore, continue to access financing but in a manner that best serves the interest of the people,” it added.

The statement said it was important that Ghanaians knew that while the NPP claimed that it came to meet a national debt of 40 trillion old cedis in 2001, at the end of 2008, the country’s debt was $8.1 billion (GH¢10 billion).

This was despite the fact that under HIPC, $4.0 billion of the country’s debt was wiped off.

“It will be interesting to hear the NPP tell us what occasioned the above development and also how they expected government to finance the repayment of the difficult financing arrangements they entered into like the Eurobond,” the statement added.

Source: GNA