Former Finance Minister Seth Terkper has said the country cannot continue to borrow to finance projects, describing the spree of borrowing as worrying and unnecessary.
“Let me grant that we have the capacity to borrow so much money, why did we rush to the IMF for COVID-19 for US$1 billion, and why did we have to go and raise the Stabilisation Fund to take all the money out.”
According to him, the last three years was the best in terms of oil revenue for the country, adding, oil production increased from about 70,000 barrels per day from the time the Mahama administration left office to about 190,000 per day.
At the same time, the price of oil shot up from about US$40 per barrel to US$60 per barrel.
He continued: “One is baffled…I did not want to question the government but for the purpose of the clarification, what was the rush about.”
Speaking further, he said the government, in 2019, used 98.8% of gross tax revenue to settle interest payments as well as wages and salaries, leaving only about 1.2% to finance other projects.
According to him, the government is extending the debt profile to long-term to avoid payments of principal and others.
He argued that the government cannot continue to borrow to pay a percentage of the interest payment.
Mr Terkper said the President’s announcement to put up 88 projects does not conform with to how Ghana does things and will continue to do things.
“In the first place, the mid-year review, when it comes with a supplementary budget which is where this is going to come to, the constitution is quite clear on the purpose of the supplementary budget – which is anything which is not anticipated in the budget.
“And one will think that for 88 hospitals, even if they are all district hospitals, even if they are all chip compounds, are big projects”.
“I think is a tall order even if it’s going to be completed”, the Chartered Accountant and Consultant mentioned.