A member of the finance committee in parliament and minority MP for New Juabeng South, Hon. Mark Asibey says the current economic situation within the country is sinking because, the government has been hiding information on the true nature of Ghana’s debt stock.
The Honourable Member of Parliament indicated that, the 10.75% interest on the $1 billion Eurobond was ‘’embarrassing,’’ because Ghana would be paying a total of $2.5 billion in the next 15 years on the loan that we’ve gone for.
According to Hon. Asibey Ghana could not go to the Eurobond with our Sovereign guarantee because it has crippled, therefore we had to go to the World Bank for $400 million policy based guarantee which allows the World Bank to pay off Ghana debt when we are not able to do so.
Hon. Asibey explained that our credit rating which is now at B1 is an indication of how bad the government has managed our economy.
He said that the Eurobond we have issued and the interest at which we are paying it could have built about 10 more NI highways, because the cost of the NI highway was costed at $150 million.
He explained that, our economic fundamentals were not the best including our macro-economic conditions, inflation, GDP growth are all not the best and therefore government failed to analyze all these factors before issuing the Eurobond.
He described Ghana’s bond as a junk bond and so no one is interested in it, in his opinion Ghana should have reached the rating of A2 like Poland after Kuffuor’s government reached B3.
The minority in a statement indicated that government had “securitised” its arrears to SSNIT without recourse to Parliament.
“It also emerged from the review that the government at the end of December 2014, securitised its arrears to SSNIT in the tune of 914 million cedis. Parliament was not informed and has not been up to date. As a result of the behind the curtain securitisation of the arrears, the fiscal deficit for 2014 has been revised upwards from 9.4% to 10.3% of GDP.
“There have been double digits fiscal deficits for 3 back to back years which have never been seen before in this country. For the avoidance of doubt, the non recourse of Parliament in securitising its debt to SSNIT is unacceptable. Parliament must probe into the securitisation of government’s debt to SSNIT, ” the statement indicated.
Ghana’s total debt stock increased by GHc5 billion more, between May and June 2015.
According to figures from the Bank of Ghana, the country’s total debt stock now stands at GHc94.5 billion, representing 70.9% of Gross Domestic Product (GDP).