AKUFO-ADDO HAS A BETTER RECORD THAN MAHAMA AS FAR AS OUR DEBT MANAGEMENT IS CONCERNED
Many a time when Mahama and his lieutenants mount the podium to speak about the economy, their refrain has been that Akufo-Addo has borrowed more than Mahama and even Mills.
Isaac Adongo has been consistent with his claim that the Akufo-Addo administration has over-borrowed and that no administration before it in recent years, can best this poor record. Adongo and the entire NDC have been throwing dust into the eyes of Ghanaians with this narrative.
At page 30 of the 2018 Budget Statement, Figure 4, has the headline; Trends in Public Debt, figures were provided about the borrowing rates of the last NDC administration. You would see that on the contrary, the NDC over-borrowed.
1). 2013: 47.45% NDC
2). 2014: 49.9% NDC
3). 2015: 25.97% NDC
4). 2016: 21.98% NDC
5). 2017: 16% NPP
6). 2018: 11% NPP (without financial sector bailout).
7). 2018 (19% with financial sector bailout). Therefore, even with the financial sector bailout, the current Government is borrowing at lower rates.
What Adongo and Mahama and of course, all their wizards in Economics rely on are nominal figures to create the impression that this administration has borrowed more than they did. The chorus has always been that “We left a total debt stock of GHS120 billion, but today, Ghana’s debt stock is GHS256” This table above makes nonsense of that position.
Emphasis has to be made on the fact that we use nominal figures only to make comparison with a particular fiscal year. For example, Ghana’s total debt stock in dollars stood at almost 28 billion at the end of December 2016. At that time, 1$ was equivalent to GHC 4.15.
Today, because of depreciation, $1 is now being exchanged for GHC 5.8. Therefore, even if Akufo-Addo has never taken any loan since becoming a president, Ghana’s debt stock in cedi would have been over GHS 160 billion.
This simply suggests that over GHS40 billion of Ghana’s current debt stock is depreciation and not more money being borrowed.
If one disentangles depreciation and inflation effects to get real figures, Adongo’s so-called GCS256 billion will be far less.
One thing they fail to project is the debt to GDP ratio of the country when they left office in comparison with what we have now.
Mahama left our debt to GDP at a staggering 73.1%. It was and still remains the highest to have been recorded in recent history.
Even in the face of COVID-19 which came with huge financial troubles, leading to additional debts incurred, as at July 2020, our debt to GDP stood at 68.3%.
In effect, Akufo-Addo beats Mahama to pulp in debt stock management as the figures have clearly exemplified. Not even COVID-19 with its huge challenges could decapitate Mahama’s abysmal performance in this area.