The minority National Democratic Congress (NDC) in parliament has rejected the 2019 budget of the government stressing that the rapid decline in the value of the cedi has significantly undermined the credibility and sustainability of the budget.
The minority has therefore called on the government to present a new budget to parliament that will reflect the real fiscal and macro dynamics of the economy.
The minority NDC made the call at a media encounter in parliament yesterday to present the ‘real state of the nation’ to Ghanaians.
The media encounter was led by the ranking member of the finance committee and NDC MP for Ajumako/Enyan/Essiam, Cassiel Ato Forson and assisted by the minority leader, Haruna Iddrisu
“The rapid decline in the value of the cedi has thrown the economy in disarray and the projections surrounding it, as contained in the 2019 budget,” he said adding that the current economic indicators have undermined confidence in the economy and also sent wrong signals to the investor community.
According to the ranking member, the 2019 budget statement presented by the Finance Minister in November, last year can no longer be relied upon as the true blue print upon which the management of the economy for this year can hinge since the credibility and the sustainability of the budget have completely been undermined by the depreciation of the cedi.
“In the 2019 budget, all fiscal and financial estimates were made using a projected cedi/dollar exchange rate of GHC4.8 per dollar but currently the cedi/dollar exchange is GHC5.65 which means that all government loans that were expected to be serviced at the projected exchange rate of GHC4.8 have suddenly become more expensive”
He explained that the bad management of the cedi has resulted in astronomical increases in the prices of goods and services in the country while the country’s total debt has also seen astronomical increase.
The ranking member noted that in November, 2018, the stock of total external debt as reported by the Bank of Ghana was $18 billion which is translated to GHC86.4 billion at the rate of GH4.6 but at the current exchange rate the value of the debt stands at GHC101.3 billion meaning that the depreciation of the cedi had added GHC15.3 billion to the debt stock of the nation
He said when the ruling New Patriotic Party (NPP) government took over the reins of government in 2016 the total debt stock of the country was GHC122.3 billion but as at November, 2018 the total debt stock had ballooned to GHC172.9 billion.
He further indicated that when government bonds of GH13.6 billiion was issued to ‘clean’ the banking system and the new additions of GH15.3 billion brought by the depreciation is added, the total debt of the country will be a whooping GHC201.8 billion which means that in barely two years in government, the NPP government led President Nana Akufo-Addo has borrowed GHC80 billion but there is nothing to show for it.