The Minority in Parliament has said that if Ghana’s rising debt is not checked it would put the country on the path to recession.
According to the Minority, despite the numerous loans obtained from the capital market to pursue various developmental projects, little has been achieved with majority of the loans either misappropriated or ending up in individual’s pockets.
Ghana’s total debt stock, which stood at GHc53.1billion (US$24.5 billion) as at end of December 2013, increased to GHc79.6 billion (US$24.8billion) at the end of December 2014.
Of the total public debt stock, external debt was GHc44.5billion (US$13.9 billion) while domestic debt amounted to GHc35 billion (US$10.9), representing 55.96 percent and 44.04 percent of total debt stock respectively.
Enormous implications
According to the Minister of Finance, Seth Terkper, the country’s total debt stock as at May 2015, stood at GHc90 billion, representing 67.53 percent of GDP.
The amount is made up of GHc53.8 billion and GHc36.2 billion for external and domestic debt respectively.
Despite this, the country has continued with its borrowing with Parliament on Tuesday approving four major loan facilities totaling over US$606 million and a further €17.3 million secured from various financial institutions.
The institutions include the World Bank (US$150 million), African Development Fund (US$56.80 million), Kreditanstalt fur Wiederaufbau (KfW), Frankfurt am Main (€17.3 million) and the International Development Association (US$400 million).
But the Minority, commenting on the various loan agreements, said the trend of borrowing was becoming too much, arguing that its implications were enormous on the economy.
