Former Presidebt John Deamani Mahama has taken a swipe at Vice President Dr. Mahamudu Bawumia over the latter’s claim that excess capacity payment affected Ghana’s debt levels.
Dr. Bawmunia at a public event held by the Accra Business School asserted that one of the major reasons why Ghana’s debt level increased was due to the excess capacity payment.
However, the former president says “the monies paid to the IPPs, which is deceptively couched as payment for “excess capacity” are in fact subsidies paid for power that has been generated and supplied to consumers.”
“We had done sufficient work before our exit in 2016, to address the financial bottlenecks in the energy sector. One of the outcomes of this work is ESLA, which to date has given this government about GHS 23 billion. This should be enough to substantially ease the financial problems of the sector. The now legendary mismanagement of this government has however ensured, that despite collecting all this money, IPPs are currently owed over $800 million equivalent to about GHS 6 billion.”
The 2020 presidential candidate for the NDC started that the country is in its current state because of some “unwise” decisions government has made.
He further opined that the decision to run to the IMF, for instance, was taken at a time when the economy had already suffered substantial damage.
“After a lengthy period of living in denial and plunging the economy into unprecedented doldrums, government finally decided a few weeks ago to request an IMF programme. Inflation stands at a 19-year high of almost 30% for June and is almost set to rise. Our deficit and revenue targets have so far been badly missed, and we are most likely to post yet another double-digit deficit at the end of this financial year. Our public debt has continued to mount.”
“Latest information indicates that government has up to GHS 40 billion in arrears and contingent liabilities, in addition to the official public debt of about GHS 400 billion. On the back of this, it is believed that our debt to GDP ratio runs into the 90% region. Our ability to meet our debt service obligations remains tenuous, with Ghana ranked as the country with the second-highest likelihood of debt default in the world after El Salvador. It is no secret that our foreign currency reserve position is extremely precarious. This leaves us vulnerable unless there is an urgent injection of additional foreign exchange inflows,” he added while addressing the Minority at a workshop they organised.
By: Rainbowradioonline.com/Ghana
