Vice President Dr Mahamudu Bawumia has disclosed that the loans procured by the Nana Addo led administration have been used to finance more than a 100, projects.
He said the government can account for all the projects undertaken with all the loans contacted.
“The projects that we have undertaken from the loans over the years, you will see that we borrowed to build the University of Environment Science and Sustainable Development, that is part of the debt, the Pokuase Interchange is part of the debts, the Tema Mpakadan Railway is part of our debt, the Kumasi Airport Phase 2 is part of our debt , Tamale Airport is part of our debt.”
Meanwhile, he has attributed Ghana’s current debt stock of 80% Gross Domestic Product (GDP) to the Covid-19 outbreak, the banking sector clean and payment of excess power.
The Vice President says if not for these three major challenges that confronted the country, Ghana’s debt stock to GDP would have been 68% and not the 80% we have currently seen.
He stated these remarks while addressing TESCON members on Thursday, April 7, 2022, on the state of the economy.
The World Bank had argued that Ghana’s public debt stock as of now exceeded the 80% of Gross Domestic Product (GDP) mark, putting the country in a tighter corner with respect to financing and interest payments.
The Bank of Ghana, in its January 2022 Monetary Policy Report, said the stock of public debt was equivalent to 78.4% of GDP at the end of 2021, compared with 76.1% of GDP at the end of 2020.
The country’s total public debt stock stood at about ¢344.5 billion as of November 2021.
But the Country Director of the World Bank, Pierre Laporte, reacting to the data noted that
The data as we know is close to 80% of GDP. Probably, now as we speak, it might have exceeded.”
Dr. Bawumia reacting to this and other comments by other experts admitted that the debt stock to debt stock was 80% but we’re caused by the Covid-19 outbreak and the banking sector clean-up.
According to him, in addition to the Covid expenditure, the banking sector clean up exercise and payment of excess power in the energy sector as a result of the contracts signed by the National Democratic Congress (NDC) administration, accounted for the rising pubic debt.
Regarding the Covid spending, he stated that the government needed to save the lives of the people hence the decision to prioritise spending in the health sector in order to restore the health of the people.
Dr Bawumia noted that spending in all these areas cost the government ¢50.1billion.
“Between 2019 and 2021 Ghana’s debt to GDP increased by 17.6 percentage points of GDP. It should be noted that without the 15.1 billion of the exceptional items – the financial sector and then the energy and Covid Ghana’s debt to GDP would have been about 68 per cent instead of the current 80 per cent,” he said.