The government has strongly defended its stance on continuous borrowing which has led to a high debt stock for the country.
According to government, borrowing in the covid era is being done by many countries across the world and it is only in Ghana that borrowing has been made a political matter.
Former president John Dramani Mahama had chided the government of hiding behind Covid-19 to borrow recklessly.
“COVID19 only became a pretext for reckless election related spending, which produced the largest ever budget deficit in the recent economic history of Ghana last year. Our debt has ballooned to unsustainable levels – topping 80% of GDP – exposing us to very high risk of debt default,” Mr Mahama bemoaned.
“Almost all of our tax revenue is used to service our debt and the effect has been the introduction of several new taxes. This has led to rampant increments in the prices of goods and services. This is primarily responsible for the hardships Ghanaians are going through now.”
However, deputy finance minister John Kumah said insists the government continues to borrow because Mr Mahama left the country with huge debts.
“…if he talks about increases in borrowing, yes we have seen that but much of this borrowing went to address the debts he [John Mahama] left behind, the take or pay contracts he signed in the energy sector and the billions that we have paid. We spent about 25 billion cedis trying to save the banks,” he told Starr FM.
“So, if we have borrowed, we have borrowed because he plunged this country into a very difficult situation that we needed to redeem. And that we have done and have shown competence in the management of this country.”