The Chairman of the Political Committee of the Convention People’s Party (CPP), Mr Ekow Duncan, has stated that a GDP/Debt ratio of 45 per cent does not necessarily impede the growth of the economy.
He pointed out that recent studies on the subject showed that economic growth slowed at a GDP/Debt ratio of more than 90 per cent.
Commenting on the statement of the New Patriotic Party (NPP) in the Daily Graphic of Friday, September 27, 2013, that the GDP/Debt ratio of 45 per cent impeded the growth of the economy, he said the NPP got it all wrong.
Mr Duncan recalled that at a press conference addressed by its Parliamentary Spokesperson on the economy, Dr Akoto Osei, the NPP said the GDP/ Debt ratio of 45 per cent was unsustainable and either impeded the growth of our economy or did not promote economic growth.
According to Mr Duncan, the NPP got it all wrong, and it was obvious that the party was unaware of recent studies on the correlation between GDP/Debt ratio and economic growth.
He quoted from recent studies (“Growth in a Time of Debt”) that revealed that economic growth slowed at a GDP/Debt ratio of more than 90 per cent.
Another study that was a replication exercise based on the data of the same study, according to Mr Duncan, asserted that the figure of 90 per cent as the GDP/Debt ratio in relation to slow economic growth was imaginary.
According to the chairman of the Political Committee of the CPP, the valid deduction from the two studies for the guidance of policy makers was that there was no proof that a high GDP/Debt ratio causes slow growth because it was plausible that slow growth caused debt.
The issue, according to him, is not the quantum of debt, but the productive and efficient utilisation of loans.
He, therefore, agreed with the NPP that the NDC government should inform the nation about what it did with the borrowed funds.
He pointed out that the application of part of the Eurobond facility recently contracted by the NDC government to the payment of principal and interest on past loans indicated that previous loans had not been applied to efficient and productive investments to generate profits for loan repayment, but to consumptive expenditure and corruption.
This direction of loan utilisation, he said, was the cause of unsustainable debt that posed the greatest threat and danger to the growth and development of our economy.
Mr Ekow Duncan appealed to Ghanaians to elect the CPP to power to continue the investment achievements of the CPP Government of the First Republic.
A CPP government, he said, would promote investments in the strategic and productive sectors of the economy to achieve an accelerated growth and prosperity of the nation. These investments, according to him, shall necessarily be focused on the development of the productive resources of the nation for export and the substitution of imports with domestic production in areas where the nation has actual or potential competitive advantage.
He mentioned the development of bast fibre for the production of jute sacks for export and domestic consumption, the production of sugar and ethanol, and the development of a brick and tile industry to be within the investment programme of a CPP government.
Source: Daily Graphic
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