The Chairman of the Finance Committee of Parliament, Dr. Mark Assibey-Yeboah has revealed that Ghana’s total national debt as at the end of August 2020 stood at GH¢267.
7 billion, representing 69.7 percent of Gross Domestic Product (GDP).
According to him, this figure differed from the 76.6 percent of GDP figure published by the International Monetary Fund (IMF) because the IMF had projected the debt figure to the end of 2020.
It also included non-central government liabilities, which are usually not included in national debt computation.
Dr Assibey-Yeboah made the disclosure when the House approved GH¢27.43 billion Expenditure in Advance of Appropriation for January to March 2021.
The amount would be sourced from the Consolidated Fund for the purpose of meeting expenditure necessary to carry on the services of government in respect of the period expiring three months of the Financial Year.
Finance Minister, Ken Ofori-Atta on Wednesday presented the House the Expenditure in Advance of Appropriation from January to March 2021, and sought its approval for an amount of GH¢27.43 billion to be withdrawn from the Consolidated Fund to meet expenditure necessary to carry on government services for the period expiring three months of the Financial Year.
The presentation is in line with Article 180 of the 1992 Constitution and the Standing Orders of the House.
Dr Assibey-Yeboah gave the breakdown of the appropriation as: Compensation for employees GH¢7.7 billion; Goods and Services as GH¢1.59 billion; Interest payments GH¢7billion; Subsidies GH¢259 million and Grants to other government units GH¢4.34 billion.
The rest are; Social Benefits GH¢41.2 million; other Expenditure GH¢813.6 million; Capital Expenditure GH¢1.9 billion; Arrear Clearance GH¢350 million and Amortization GH¢3.42 billion.
Dr Assibey-Yeboah announced that the Controller and Accountant General has been instructed to ensure that all Ministries, Departments, Agencies operate strictly within the levels set in the expenditure in advance of appropriation and under no circumstances should funds be wired from the Compensation of employees to cover expenditure items for goods and services or capital expenditure except with prior approval from the Ministry of Finance.
He warned that it would not be permitted for votes provided in the estimates to be used to defray indebtedness carried over from the 2020 financial year, except as provided for the estimates.
Mr. Kojo Oppong Nkrumah, Minister of Information, indicated that the GH¢350 million earmarked for the arrears clearance part of it is to defray the arrears inherited by the government from 2016.
He explained that GH¢7 billion allocated for interest payment is not only for interest payment for 2017 to now, but to pay for all outstanding liabilities for which interest is due.
He recalled that two major items had contributed to the country’s growing debt stock addition to the already existing GH¢122 billion debt.
These are the energy sector payments of about $1 billion a year (over GH5 billion) and interest associated with that and the over GH¢21 billion borrowed for the financial sector clean-up with its attendant interest.
Minority Leader Haruna Iddrisu criticized the Finance Minister for failing to share with the Representatives of the People the performance of the Ghanaian economy for the first, second third quarters of 2020, in order for Ghanaians to understand the true state of the economy.
He said Mr. Ofori-Atta should also have shared with the House the economic impact of Covid-19 on employment, revenue, and expenditure.
“So that we would understand the kind of economy, we are likely to inherit after 7th December 2020. We know, we would inherit a fractured fragile economy recovering from Covid-19,” the Minority Leader said.
Mr Iddrisu also raised concerns about country’s growing public debt which stands at 69.7 percent of GDP, saying that Ghana risks becoming debt distressed country.
“We are almost at the threshold of debt distress of 70 percent,” he said.
He urged the Minister Finance to explain to the House why the IMF is projecting Ghana’s debt at the end of 2020 to be 76.6 percent of GDP but the figures from government is different.
He questioned whether the government is providing different sets of data to the IMF and to Parliament.