Former Finance Minister Seth Terkper has said that despite the country’s ballooning debt situation, which has created little room for big-ticket government programmes to be rolled out, he is confident that the needed resources can be mobilised to undertake projects promised by former president John Mahama if elected into office.
His comments come on the back of the International Monetary Fund (IMF) projecting the country’s debt to hit more than 77 percent of GDP by end of the year, a situation Mr. Terkper attributes to high borrowing under the Akufo-Addo-led government and not the pandemic.
Asked at a press conference on Friday about how the National Democratic Congress (NDC) plans to finance its ambitious promises in its manifesto – which includes the US$10billion fund dubbed ‘BIG PUSH’ to build robust infrastructure like roads, railways, port expansion, inland ports, hospitals, social housing and multipurpose markets in every part of the country – the former finance minister said his team will use revenue from the three oil fields and other resources to finance the project.
“Our record is clear. Remember we didn’t have much fiscal space. We didn’t have much oil revenue and so we decided to use the little we have to tackle the problems of the economy. We didn’t have three oil fields. So I am saying that it is a question of managing the fiscal aspects as well as possible. We are not saying that the promises we are making are going to be easy to come by, because there are some factors we don’t control. But now we have much more information than before, and so we know where the problems are.
“This is not going to be our first experience in financing major transactions. From the interchanges, E-schools etc., we still kept the debt at 57.7 percent. We have three oil fields and we will go back to the Sinking Fund [money drawn from the Stabilisation Fund to pay debt and finance government projects] to reduce the debt,” he said.
The petroleum receipts data indicate that while 30.3 percent of receipts went to the Mahama administration from only one oil field, 56.4 percent has gone to the Akufo-Addo government from three oil fields. This, Mr. Terpker said, shows the economy should not be in its current debt situation considering how much more revenue has been accrued by this administration than any other one.
He further stated that the next NDC government will reduce the rate and cost of borrowing if voted into power this general election.
“We showed that we had the ability to borrow and at the same time reduce the rate of borrowing. This hadn’t happened in about a decade or so. The only time it happened was during the HIPC programme. We are banking our hopes on every resource available to government and our ability to be innovative and creative with initiatives which can reduce the cost of borrowing,” he said.