The Alliance for Development and Industrialization has taken a swipe at the New Patriotic Party and National Democratic Congress over the use of the public debt as a liability to the country.
According to a statement issued in Accra, the ADI says public debt can only be a liability if loans contacted from the domestic and offshore markets are not put into productive use in the medium to long term.
ADI says Ghana’s current public debt of GHC198 billion or US$38 billion should not in any way be a treat to the country’s economic development which is geared towards productivity.
“If we are talking about national productivity, we should boycott the issue of debts…if we are productive we should not be scared of debts because loans contracted for development would pay for itself in the long term,” it said.
“Every corporate institution owes, but it could only be a liability if loans contracted are not put into good use, adding that debts should translate into positive productivity,” it said.
In the United States of America with a population of 300 million for instance, its total public debt is hovering around US$63 trillion which means every USA citizen owes around US$4,600 comparative to Ghana which is less than US$200.
“Ghana for instance, contracting a loan is not liability unless it is not linked to productivity’…..adding that as the government is cleaning out its books from the banking sector to the Microfinance institutions it could take the opportunity to outsource a lot of projects and programs to the private sector.”
The ADI has called on the government to channeled most of the loans into the agriculture sector, since it is the backbone of the country’s industrialization drive.
It added that it is better for the government to find ways to support the private sector and also find a mechanism to support their Public Private Partnership, (PPP) projects to improve productivity which would mean that the public debt would no longer be a headache to any government.
Ghana’s public debt ballooned to GHC198 billion or US$38.9 billion as at the end of March 2019 representing 57.5 percent of Gross Domestic Product, (GDP), from GHC147 billion which was 49.5 percent of GDP for the same period in 2018, according to figures released by the Bank of Ghana, (BoG).
The external component of the debt increased to US$20.7 billion or GHC105.2 billion representing 30.5 percent of GDP from US$17.3 billion or GHC76.1 billion which was 25.5 percent of GDP for the same period last year.
The domestic debt also increased to GHC92.8 billion representing 30.5 percent of GDP from GHC71.8 billion which was 24 percent of GDP during the same period in 2018.
Source: Francis Agyeman
