Former Deputy Minister for Finance, Cassiel Ato-Forson, has said that the current state of the country’s economy cannot support the floating of a $50 billion bond.
According to him, the economy may grind into serious challenges if the government goes ahead with the plan to float the bond.
“Ghana’s economy cannot support a public debt of $50 billion. Debt servicing as we speak at a percentage to total revenue is about 50%. Debt services and wages and salaries takes away the entire revenue of the country so how are we going to service that debt. Are they going to borrow to service that debt? What is the size of the economy of Ghana? It is less than $50 billion. It is not applicable,” he said.
President Akufo-Addo while on a state visit to China last week urged that country’s president, Xi Jinping that Ghana was looking at floating a $50 billion Century Bondand was interested in getting China to take part.
“The Ministry of Finance and the economists in Ghana are looking at floating a $50 billion Century Bond. This will provide us with the resources to finance our infrastructural and industrial development. We are hoping that, at some stage, China will interest itself, and take a part of it as China’s contribution to Ghana’s development,” Akufo-Addo told Jinping.
But Cassiel Ato-Forson, who is also the Member of Parliament for Ajumako Enyan Esiam constituency in the Central Region said the government does not have the capacity to use the $50 billion if it successfully floats the bond.
He noted that the value of the government’s planned development programmes was far less than the amount it was seeking to raise, arguing that the current revenue of the country is woefully inadequate to guarantee the repayment of the amount and its corresponding interest.
“Government of Ghana does not have the capacity to utilize $50 billion even within 3 years. I say this because I know we don’t have prepared projects to the tune of $50 billion. So why do you go out there to borrow$50 billion put it in an account, start paying interest you cannot spend in within 2 to 3 years but excess of 4 years. What kind of economic management is this?,” he quizzed.
He is cautioning the government to “be careful” over its plan.
$50 billion bond without dev’t plan not good
Meanwhile, an economist, Dr. John Gatsi has cautioned the government against the move especially as it does not have a long-term national development plan that will provide guidance on what the money must be spent on to achieve a set target.
He said floating the bond against political promises was not sustainable.
He is therefore calling on the government to consult various stakeholders especially parliament over the matter to ensure that a sound decision is taken.
“A country should engage in such a long-term borrowing based on a long-term development agenda approved by parliament and guiding all of us. That should be the case because when you are using natural resources as a mortgage for the country, you need to know that commodity goes through volatility in terms of price and when such things happen, they pose problems for the country,” he said.
“It is inappropriate to allow one government to put the country on that path bearing in mind the risk this poses to us in the future….It will be in the interest of the government to get the attention and the buy-in of other stakeholders especially parliament before engaging in further this discussion,” John Gatsi added.
Source: citinewsroom.com
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BEANIMAN, why do you waste your time on talkertives? all ndc know is to talk, just imagine a group of people coming from areas known as the most poorest in the country,one would have expected them to have a little sense to manage an economy if they happen to get the chance to rule, but what did we see create l000*00t and share and when those with sense and the natural resources of this country are managing their resources es to benefit everyone these people come out to condemn, meanwhile they don't have mo solution and ideas to offer, so such people are left out for the country to move forward, because they see every good thing as bad for them and bad things as good because they never saw good things in their lives growing up! JUST IGNORE THEM AND LET'S MOVE FORWARD we can't live like them and can't act like them so LET'S MOVE FORWARD! Osagyefo once said FORWARD EVER & BACKWARDS NEVER so why do we tolerate people who want to drive us back? Ghana is on course and ndc will rot in opposition! GOD BLESS MY PRESIDENT OSEADEAYO NANA ADDO DANKWAH AKUFO ADDO & GOD BLESS OUR HOMELAND GHANA! FORWARD EVER,BACKWARDS NEVER!
DON'T MY THOSE ***barred word*** FUUUUUULLLLLLLS, BORROW TO DEVELOP EVERY NOOK AND CRANNY OF THE GHANAIAN ECONOMY. FOR HAVE ALL THE RESOURCES TO PAY EVEN FOR 100 YEARS OOOOOOOOOOOOOOOO. ***barred word*** NDC CREATE LOOT AND SHARE PARTY, YOU NO CHOP NOTHING OOOOOOOOOO
I sometimes wonder what educational institutions granted some of your intellectuals their doctorate degrees. Have they even considered the amount of money countries like UK borrowed to get their country to the level it is at today? Bonds floated by the UK government as far back as the first world war were finally paid off just about five years ago. Now compare the economic benefits attained by UK in relation to the cost of borrowing and also factor in inflation and even a sixth form economics student will even tell you that it was value for money. You people love visiting Dubai but have you ever investigated how much they borrowed in the 1950s using their oil as security against the loan? If you want to achieve rapid development then this $50 billion loan is in the grand scheme of things peanuts.
$50 billion over 100 years comes down to borrowing $2 billion per annum. Are we not borrowing more than $2 billion dollars every year? It's the projects for which $2 billion dollars will be committed to every year, assuming that is how we intend to float the bond, over the 100 year stretch which needs to be looked at. When i posted on Ghanaweb under a story where Avedzi said he would oppose it such a deal, it was censored. Did Mahama and Mahama not lootttttttt more than $2 billion dollars if aggregated every year?
only ***barred word*** will support the government to go for a bond of 50 billion dollars spread over a hundred years period for us to pay...this is senseless, i thought bawumia knows better...i just realized that there is nothing in his head...he only knows how to talk... where is the money they claimed is already in the country?
The government should go ahead and float the $50 Bn bond. It will help the country very much with money available to finance the development of the nation. Only they should have the list of projects to be financed ready and act on them immediately. FOR ONE THING, ANY PROJECT OR PLAN WHICH THE NDC WILL KICK AGAINST WE SHOULD KNOW IT IS A GOOD PROJECT SO THE GOVERNMENT SHOULD NOT MIND THEM AND GO AHEAD AND IMPLEMENT IT
MR ATO FORSON PLS LET THE WISE MEN DO THEIR WORK WAI.