The Minister for Finance, Ato Forson, has defended the government’s recent borrowing spree, which saw the country debt stock rising by GHC59.68 billion within a month.
This move has raised eyebrows, especially when compared to the borrowing strategy of the previous Akufo-Addo government.
During Akufo-Addo’s administration, the government pursued a prudent debt management strategy, aiming to reduce borrowing costs over the medium term.
This approach was outlined in the State of the Nation Address, where the government emphasized its commitment to ensuring that financing needs were met while keeping borrowing costs in check.
In contrast, the current government’s borrowing strategy has been criticized for being overly aggressive.
The GHC59.68 billion borrowed in a single month is significantly higher than the GHC12 billion borrowed by the NPP government in 2017 over a 12-month period.
This has raised concerns about the sustainability of Ghana’s debt and the potential implications for the country’s economic stability.
Ato Forson has argued that the net borrowing of GHC 7.1 billion is primarily a buffer for servicing maturing debts accumulated by the previous government.
However, critics point out that this does not address the underlying issue of the country’s increasing debt burden.
The government’s plan to borrow GHC 200 billion in a single year would increase the debt stock by at least GHC 170 billion, a move that has been described as alarming.
-BY Daniel Bampoe
