Former Deputy Finance Minister under the erstwhile Mahama administration, Dr. Cassiel Ato Forson, has warned that the Akufo-Addo might default in paying its debts.
The Ranking Member of Parliament Finance Committee who was reacting to the 2021 budget statement on TV XYZ Morning Update indicated that the government continues to misreport public debt figures which has resulted in the country facing difficulties.
“We have not sold our assets but we’ve been borrowing so all of this must reflect in the public debt,” Ato Forson said as he projected that the country may not be able to pay the debts.
“You recall that we left office with 120.3 billion Ghana cedis as 2017 January, that was the numbers. In fact at the end of 2017 public debt jumped to 242.5 billion Ghana cedis and then the problems started in 2018 when the government claims they have run a deficit of 11.6 billion. In the end, it wasn’t 11.6 billion, apparently the true deficit was 21.4 billion Ghana cedis. Simply put they had hidden 9.8 billion Ghana cedis from Ghana’s data,” he disclosed to host Eric Ahianyo.
To him, the government had not been truthful about public debt which has now been exposed and the Akufo-Addo administration now has to impose more taxes on citizens to deal with budget deficit.
“Today we find ourselves in the situation that if care is not taken, Ghana may default in paying the debts,” Ato Forson added
“Let me be very blunt here, the reason why we are where we are today is as a result of government is reporting and cooking economic data,” he said and contended the COVID-19 pandemic is not to blame for the ailing economic.
“Government cannot blame COVID as such…You can’t see the pandemic having a major impact on Agriculture. It has some impact on the tourism industry, the airline industry, travel and tours… It doesn’t cut across and evidence from the GDP growth shows that it doesn’t cut across.
Minority Red Flags
Yesterday, Dr Forson said the Minority would reject the budget statement because the government has been continues to misreport public debt figures.
Contributing on the floor of the house during the debate on the budget, Dr. Forson stated that the government has increased the public debt stock by GH¢171.2 billion since 2017 to date. In addition, he said, there has been an increase in the debt-to-GDP ratio by 20 percentage points.
He also indicated that an amount of GH¢6.2 billion in energy sector payments was excluded from the budget and sent a caution to the Ministry of Finance that until the anomalies are corrected, his side will not pass the budget.
“We will not be part of the passage of the budget until we track the way we accumulate debt,” he said on Tuesday.
According to Dr. Forson, who is also a Member of Parliament for Ajumako-Enyan-Esiam, in 2017 government increased the debt by GH¢25.2 billion.
“Our public debt moved from GH¢120 billion to GH¢145 billion. Sadly, we lost our way starting in 2018. Government cannot blame Covid entirely for the economic mess that we are going through. In fact, the mess started in 2018.”