The Minority in Parliament’s scare-mongering and falsehoods in relation to the ongoing debate on the public sector debt cannot be allowed to stand, Information Minister Kojo Oppong Nkrumah has said.
According to him, the Minority appears “confused” about the difference between “growth in the debt stock and borrowing”.
A former deputy minister, Mr Cassiel Ato Forson, on Tuesday, 11 June 2019 had said the Mahama administration left behind a public sector debt of GHS120 billion, not GHS122 billion as claimed by some communicators of the governing New Patriotic Party (NPP).
The MP for Ajumako-Enyan-Essiam told journalists at a press conference that the government is using the 2017 exchange rate to calculate the debt incurred in 2016, a situation, he says smacks of unfairness.
The lawmaker revealed that the central bank has correctly captured the right figures on its website but the Ministry of Finance has not done that.
He further called on the Minister of Finance, Mr Ken Ofori-Atta to rectify the error.
“The NPP is out there saying that the NDC left a public debt of GHS122 billion. In fact, that is not true. It is not true because the actual debt the NDC left behind was GHS120 billion,” he said.
“The NPP decided to use different exchange rates in accounting for our foreign debts. In fact, because we left office in December 2016, they should use 31 December 2016 rates and not 30 March 2017.
“In fact, they decided to use the March numbers to change the numbers and create the impression that the NDC left a public debt of GHS122 billion instead of GHS120 billion.
“There is an addition of GHS2 billion which the Auditor-General, in its report to parliament, pointed to the government that what they are doing is deceitful and they are not representing the right fiscal numbers.
“I have also noted that the Bank of Ghana has captured that appropriately but the Ministry of Finance has not, so, the minster responsible for finance should do what is honourable and correct these concerns.”
In response to the Minority’s comments, Mr Oppong Nkrumah, who is currently on international assignment in Guinea, said in a voice release sent to the media that: “It is very unfortunate that the Ato Forson-led Minority appears confused between a growth in the debt stock and borrowing”.
“If they [Minority] will pay attention, they will realise that we have not said that the debt stock has not changed. What we have said is that for anybody to say that a change in the debt stock of GHS80 billion means that the administration has borrowed GHS80 billion, that demonstrates that that person does not understand how national accounting is done.”
He added: “As we have explained, there are up to about five reasons for which the debt stock has changed. The first being the fact that they contracted old loans, some of which are being disbursed now.
“All of that new disbursements add to the debt stock and we have cited examples of some of them; Tema-Mpakadan railway is an example, which the new disbursement adds to our current debt stock today. If you take the Eastern University in Somanya, the new disbursements add to our debt stock today.
“Number two: we have talked about the fact that the exchange rate differential also adds to our debt stock. So, if I owed a billion dollars at GHS4 to a dollar, all I owed is GHS4 billion. If the exchange rate changes to GH5 today, the debt stock will change, it doesn’t mean the administration has borrowed”, he explained.
“Number three”, Mr Oppong Nkrumah continued: “We have also said that there are some disbursements that do not come to the central government to utilise but it is all added to our debt stock. For example, the nearly US$1 billion that the former administration contracted under the IMF, which was disbursed after every successful review by the Akufo-Addo administration, comes to add to our debt stock but that money doesn’t come to the government, it goes to the Bank of Ghana for balance of payment support”.
“Number four: we have also mentioned that in that GHS80 billion growth, you will find some double counting. Especially for liability management, about a one-billion-dollar debt retirement which is about GHS5 billion, which we have borrowed another GHS5 billion on standby, which will be used to repay. Those two 5 billion items will come up to the GHS10 billion, so, you will find that double counting in there.
“Before you come to new borrowings by the new administration, which will not exceed $ 500 million dollars under the IMF programme or now the 750 million dollars in the year 2019.
“So, our argument is that when you see a change in the debt stock, you cannot go out there and argue that they borrowed GHS80 billion and that scare-mongering, that falsehood by the NDC Minority cannot be allowed to stand.”