Don’t choke future generations with debt; NPP man cautions government

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Parent Category: Our Country

Category: Elections & Governance

Created on Friday, 17 June 2011 00:00

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Don’t choke future generations with debt; NPP man cautions government

A leading member of the New Patriotic Party has expressed worry over what he claims is the

borrow-happy tendencies being exhibited by President John Mills’ government.

Hackman Owusu Agyemang fears the future generation will be stifled with so much debt if the

rate at which government is borrowing is not curtailed.

Speaking to Joy News’ Parliamentary Correspondent, Sammy Darko, the Member of Parliament for

New Juabeng North criticized the legislative body for not playing its oversight

responsibility over the executive as far as loan and financial agreements were concerned.

“Parliament has not been terribly effective in its oversight duties over the executive.

Whichever government is in power, parliament has not been effective,” he observed.

Even though he conceded every country needs funds for infrastructural development, he argued there must be a limit to which a government can borrow, especially when the investment for which those monies will be put to are not clearly defined.

Owusu Agyemang cited the STX loan costing $1.5 billion, for 30,000 housing units, and a potential $10 billion for 200,000 units, an investment he considered audacious and unprecedented.

He admitted the NPP, whilst in government, also borrowed for infrastructural development but maintained it was not at this rate.

He is convinced the NDC has borrowed more money in two and half years than the eight years  of the NPP in government.

According to him, the House on Thursday approved almost half a billion in loans, something he insists is alarming and should not be countenanced.

“The moment you begin to acquire that much debt, and if you do not improve the productive capacities of the economy, if you don’t take care, you will establish a vicious cycle of always going into debt.”

Fiscal space

But his assertions have been debunked by the Chairman of the Finance Committee of Parliament.

James Afedzi told Joy News’ Dzifah Bampoh Ghana as a developing country, or as at the lower end of the middle income country, needs money for infrastructural development in education, energy and roads.

“All these things put together means that as a country we still have to find ways to catch up with these issues."

He said arguments that the Ghana is borrowing too much is not sustainable because no country

will credit Ghana with loans knowing too well the country will not be able to pay back.

He argued “Ghana has the fiscal space to borrow and that is why we are borrowing”.

He reiterated that monies borrowed have to be invested in productive ventures, adding, the government is doing just that.

He said unless there is evidence to suggest that loans are diverted into other unproductive activities, he was convinced the Mills administration is on the right track.

He also dismissed assertions that the legislature is not playing its over sight responsibility well enough, saying, Parliament has had to turn back the executive on some cases it was convinced the loans were not properly conceived.


Story by Nathan Gadugah/Myjoyonline.com/Ghana