Former Finance Minister, Seth Terkper, says the erstwhile John Mahama government managed Ghana’s debt better than the governing New Patriotic Party (NPP) is currently doing.
According to him, the Akufo-Addo government has performed poorly when it comes to the payment of debts.
He said some mechanisms such as the Sinking Fund, Infrastructure Fund and other mitigating measures for debt payment put in place by the erstwhile government are not being applied effectively by the current administration.
Up until 2013, we [government] were borrowing more than we were paying down. That we [NDC] turned this around between 2013 and 2014 and the rate at which we were borrowing, giving the Sinking Fund, taking off the first sovereign bond, using the Sinking Fund to also support domestic bonds and others, we started to see the rate of borrowing going down. Which meant that we have found a mechanism, not for all debts but for our bonds [foreign and domestic] to be paid down,” Mr. Terpker said, as quoted by Classfmonline.
“The debt stock which was berated at the end of 2016 and the fact that the rate of borrowing was going downward was ignored, that debt stock has become lower than the debt stock at the end of 2018.”
The former Finance Minister said the Mahama administration managed debt payments with limited resources yet with the abundance of resources at the disposal of the Akufo-Addo government, debt management strategies have been poor.
He said every government borrows, but “when you borrow, you must pay, which explained the [introduction of] Sinking Funds.”
“This is happening with three oil fields, as against one oil field. We [NDC] did this with one oil field, now we have three oil fields, output has almost tripled and crude oil prices which were in the tanks around $40-$42 at the time we were leaving office are currently at about $63-$64 and shot up to about $86 last year. So, the question is, why are we not using these mechanisms to reduce the debt?” he added.
