…Over heavy-borrowing

There appeared to be an outbreak of confusion yesterday at the Flagstaff House when President Akufo-Addo was holding his maiden encounter with the press and one the administration’s numerous elephants-in-the-room was poked.

Upon being asked, the logicality of the New Patriotic Party government borrowing over GHc40billion in six months, even though selfsame people had criticized the predecessor Mahama regime for supposed over-borrowing, there was an open run for cover.

President Akufo-Addo started a laughable chain reaction, when he dropped the question like hot potatoes into the lap of Vice President Mahamudu Bawumia.

In an ensuing ruse of what looked like musical-chairs, Dr. Bawumia inherited the hot mess and became a total fumble. An attempt to draw Finance Minister, Ken Ofori- Atta, into the issue, ended up a leap to nowhere, as the beleaguered Ofori-Atta would not take this fall for the embattled administration.

Left to carry his cross, the Vice President then braved the question, but ended up tip-toeing around it in a most shambolic manner that further poisoned the Dr. Bawumia’s already ailing credibility.

The whole trouble had started when Bernard Avle, a senior journalist with Accra-based Citi FM, broke the glass ceiling of the alleged stage-managed press encounter to ask the first intelligent question of the program.

Weathering a pre-conference arrangement for journalists to submit questions they wished to ask the President to the Information Minister for editing, Mr. Avle asked the first intelligent question of what was turning out to be a dress rehearsal to make the regime look good.

“Mr. President, I remember during your campaign, yourself and the Vice President expressed worry about the level of debt that Ghana was incurring and among other things you said that because of the mismanagement we were having to borrow and then  we had enough internal resources and therefore we should plug the loopholes. Permit me to give you some figures.

“In March this year, we went for a GHc1bn 3-year bond; in April, a $2,25bn bond which translates to some GHc10.25billion was announced. In the same month we announced a $2.4billion bond to clear legacy debts in the Energy sector which translates into GHc12 billion. Last week we were told there is a 17.4 billion cedi bond being sought for.

“Putting all the figures in Ghana cedis that’s about GHc40billion, if all these bonds go through. The last time I checked our GDP was about GHc80billion. If within the first quarter we are already borrowing up to half of our GDP where are the internal resources, how much resources have you generated internally, why are we still borrowing this much?”

Immediately the question dropped, President Akufo-Addo made it clear that he was not going to answer it, and that Vice President Bawumia, the man who had been used in opposition to denigrate the predecessor Mahama government as incompetent, was to deal with it.

“Dr. Bawumia will respond about the indebtedness,” the President said to laughter from his audience which could not miss the fact that he seemed to be running from the issue which punctuates the administration’s double-standards.

But things got even more ludicrous when time came for Vice President Bawumia to answer. Dr. Bawumia looked at the President and asked whether he should answer the question from where he was sitting or walk to the lectern that had been mounted. An incensed Akufo-Addo then threw his arms in the air gesturing that he did not care a hoot what the Vice President chose to do.

Eventually, Dr. Bawumia walked to the lectern and started braving the question.

“Bernard asked a question about the debt and how it appears to be increasing. I think we have to go back a little bit. You saw that last year the deficit was 9.4% of GDP that’s where it ended and thanks to the Asempa Budget we’ve gone back on the path of fiscal consolidation to bring back the deficit this year to 6.5% of GDP. Now in doing so, you are going to be bringing down the debt stock in the process.”

In answer to the question as to why the new government is borrowing too much even though it had promised not to borrow, the Vice President was saying that the Asempa Budget was going to bring down fiscal deficit. Bernard Avle never mentioned fiscal deficit in his question.

The Vice President then also launched into blame game, drawing in the erstwhile Mahama government, even though Bernard Avle’s question never touched on the erstwhile administration’s performance.

“I’ll also let you know that in the last four years between 2012 and 2016 the debt stock went up from 45% of GDP to 72% of GDP. That means on average every year, the government was adding 6.75% of GDP to the debt stock. Now the GDP is not GHc80billion …but it is closer to GHc200billion this year, and we are going to end the year after inheriting 72% of GDP we are hoping to bring it down slightly between 70 and 71% of GDP.

“So we are looking at how we manage the finances to bring down the debt burden, so even if you are borrowing, the burden  of that we are trying to bring down through the process of fiscal consolidation…”

A fumbling Dr. Bawumia then attempted to draw in the Finance Minister, Ken Ofori-Atta, “…and the Finance Minister is here, he is keeping all of us in line.” The Finance Minister kept his distance.

The rest of the address was a rigmarole that unintentionally praised the erstwhile NDC administration’s achievement in the area of the construction of the Ghana Integrated Financial Management System (GIFMIS), even though the same Vice President was attempting to blame the NDC government for its troubles.

“What happened before with this unbridled borrowing, err which cannot be financed so you find that we owe so many contractors who have not been paid and so on. Today the GIFMIS system is really working. It is not possible to circumvent it.

“And so if there is no money you are not going to enter into that contract in the first place. And so this is actually helping us as you see keep very much aaahhh on target as far as our deficit is concerned for example. Through the first half of the year and I think that this is also seen in the domestic money market where you have seen interest rates coming down from 22% last year and just a year later you have 11.9% and if you are borrowing rampantly in the domestic market you will see that interest rate decline.

“ So the simple answer is that the debt  stock aaahh  in terms of its impact aaaahh on the burden on the economy is not increasing, the debt to GDP ratio is actually stabilizing and we are hoping to bring it down by the end of the year even if marginally.”

At the end of the long answer, the core question of why the government is borrowing heavily, where the money that it had claimed was there when it was in opposition is, and why the government is not raising money domestically even though according to both Candidates Bawumia and Akufo-Addo, “the money is there,” were not addressed.

The fallout has been a serious poison to the credibility of Vice President Bawumia, who seems to be the one that Nana Akufo-Addo loves to pick on whenever there is a dirty job to be done.

This is the same Bawumia who was put up in the Supreme Court to declare “You and I were not there” even though he was the star witness of the 2012 suit attempt to use the courts to make Akufo-Addo President after he had lost the 2012 election.



Source: therepublicnewsonline.com/ Fiifi Samuels

The Republic News Online

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