Member of Parliament (MP) for Tamale South, Haruna Iddrisu, has put forward a bold proposal to limit government borrowing to 70% of the Gross Domestic Product (GDP).
If enacted, this proposal would impose a substantial constraint on the government’s capacity to accumulate additional debt.
“This parliament must sit up and we must sit up to demand a feeling for good for all presidents and governments. I maintain that no president or government should be allowed to borrow beyond 70% of GDP,” he said during a debate on the budget allocation for the Finance Ministry on Thursday.
In addition to suggesting a cap on government borrowing, the former Minority Leader and Member of Parliament for Tamale South, Haruna Iddrisu, has advocated for a forensic audit into the indebtedness of the Finance Ministry to State-Owned Enterprises (SOEs).
He specifically highlighted entities such as Ghana Gas, ECG (Electricity Company of Ghana), and NCA (National Communications Authority) where there may be substantial debts owed by the Ministry of Finance.
“I am asking for a forensic audit as to how much money the Ministry of Finance has held on state-owned agencies, Ghana Gas, ECG, NCA. Those of them who have other holding that the office of the Chief of Staff has taken money away from them. We need to know,” he said.
As per the World Bank, Ghana’s public debt has surged from 79.6% of GDP in 2021 to over 90% in 2022, accompanied by a debt service-to-revenue ratio of 117.6%.
This escalation in debt levels raises apprehensions regarding Ghana’s capacity to meet its financial obligations and exposes the country to heightened vulnerability in the face of economic shocks.