The Director of Research at the Danquah Institute, Dr. Frank Bannor, has emphasized the nuanced nature and significance of Ghana’s debt profile discussion spanning from 2009 to 2023.
He underscored notable trends in Ghana’s debt trajectory, highlighting a substantial surge from $8.07 billion in 2008 to $29.2 billion by the end of 2016.
During the period between 2009 and 2016 under the National Democratic Congress (NDC) government, Ghana’s debt stock experienced an average annual increase of 32.75%.
Conversely, the trajectory under the New Patriotic Party (NPP) government, from 2017 onwards, witnessed a comparatively modest addition to Ghana’s debt stock, averaging about 10.68% annually.
Mr Bannor noted that this lower rate, compared to the previous administration, reflects superior economic management by the NPP, despite facing global economic challenges.
He elaborated on fiscal deficits as a crucial indicator of government financial management. Fiscal consolidation periods were highlighted, along with challenges such as the significant deficit in 2012 under the NDC, attributed to heightened spending during an election year.
This fiscal imbalance led to prolonged repercussions, including consecutive years of double-digit deficits from 2013 to 2014, ultimately prompting the government to seek assistance through an IMF extended credit program in 2015.
In contrast, the NPP’s performance showcased rare instances of double-digit deficits, with only one occurrence recorded in 2020 amidst the global upheaval caused by the Covid-19 pandemic.
This favorable fiscal track record underscores the NPP’s commitment to prudent financial management.
Furthermore, the analysis delved into the utilization of borrowed funds by the NPP government, highlighting expenditure trends from 2017 to 2023.
Mr Bannor emphasized a prudent fiscal policy prioritizing investments aimed at generating long-term benefits for future generations.
“Furthermore, our discussion delved into fiscal deficits as a pivotal measure of government financial management. We highlighted how periods of fiscal consolidation were interspersed with challenges, notably the significant deficit experienced in 2012 under the NDC, primarily attributed to heightened spending during an election year. Regrettably, Ghana grappled with prolonged repercussions from this fiscal imbalance, enduring consecutive years of doubledigit deficits from 2013 to 2014. The persistent fiscal challenges ultimately
compelled the government to seek assistance through an IMF extended credit
program in 2015.
“In contrast, when assessing the NPP’s performance, it’s noteworthy that doubledigit deficits were rare occurrences, with only one instance recorded in 2020 amid
the global upheaval caused by the Covid-19 pandemic. This comparatively favourable fiscal track record underscores the NPP’s commitment to prudent financial management. More so, the analysis delves into the use of borrowed funds by the NPP government, making clear its expenditure trends from 2017 to 2023. At DI, we firmly advocate for a prudent fiscal policy that prioritizes investments geared towards generating long-term benefits for future generations. Despite misconceptions, it is important to highlight that these funds have been deployed judiciously, with tangible evidence validating their allocation.
From the analysis, substantial sums have been allocated to various sectors, including the energy sector and infrastructure development. Notable expenditures include payments to independent power producers, construction of interchanges, road projects, railway expansion, construction of mini harbours and fishing landing sites, and investment in the healthcare sector through ambulance procurement,” he said
Contrary to misconceptions, he stressed that these funds have been deployed judiciously, with tangible evidence validating their allocation.
Key sectors benefiting from these investments include energy, infrastructure development, construction of interchanges, road projects, railway expansion, mini harbors, fishing landing sites, and healthcare through ambulance procurement.
Mr Bannor emphasized that these investments signify a strategic approach to utilizing funds for developmental projects aimed at enhancing economic growth and societal well-being.
His press conference coincides with criticisms from the National Democratic Congress (NDC) flagbearer, Former President John Dramani Mahama, accusing the NPP administration of excessive borrowing without tangible projects to show for it.