Abena Osei Asare, a Deputy Finance Minister-designate, has justified the Akufo-Addo administration’s borrowing rate since it took office in 2017.
Ghana’s debt stock is approximately GHS 300 billion, accounting for 70% of the country’s GDP.
However, Abena Osei Asare, who has also been re-nominated by President Akufo-Addo for the very same position, said the government needs to maintain some of its social intervention programs and infrastructural growth for the sake of the people, which necessitates borrowing more.
“We need to keep the Free SHS going, and we need to keep the road-building going. We must continue to implement Ghana’s CARES and provide the infrastructure that the people desire. So, what do you do in this situation? We attempt to borrow money in amounts that will benefit us as much as possible,” she explained.
President Nana Akufo Addo has stated that his government will continue to borrow money to fund projects that he refers to as “assets” in order to repay the debt.
He stated that every country, including Ghana, borrows money for development.
“We’ll take out a loan; everyone takes out a loan. The United States of America is one of the world’s largest borrowers. As a result, borrowing money isn’t always a violation of one’s freedom. The key to borrowing money for us is to use it to generate assets that will allow us to repay the loan. That is the secret… If we borrow the money and put it to good use, it will help us grow our economy and infrastructure,” he continued.
While in opposition, President Nana Akufo-Addo and his Vice President, Dr. Mahamud Bawumia, slammed the Mahama government for what they called excessive borrowing.
According to Bawumia, Mahama had an insatiable hunger for foreign loans, which he called “reckless” and “worrying.”
In the meantime, this administration has borrowed more than Mahama’s.
Excessive borrowing: Ghana’s economy is a Ponzi scheme, according to Dr. Kofi Amoah.
Dr. Kofi Amoah, a Ghanaian businessman, has expressed doubts about Ghana’s ability to grow exponentially due to the country’s excessive borrowing and inadequate handling of borrowed funds.
According to him, the country is in a more worrisome situation as a result of previous governments’ handling of borrowed finances, when it could have found a method to make better use of the money it borrows.
Ghana’s ongoing borrowing to cover past debts, according to Dr. Amoah, makes the economy run like a Ponzi scheme, which he argues is unsustainable.
He proposed that governments use what he refers to as the “multiplier effect” when borrowing money.
He explained the concept by saying that instead of investing borrowed funds in foreign contractors, consultants, and prefab materials from outside, funds borrowed for projects should be used to hire local contractors and source local materials in order to grow the local economy while also meeting the loan’s purpose.