National Democratic Congress (NDC) Member of Parliament for Bolgatanga Central, Isaac Adongo, has lambasted Vice President Bawumia’s justification of government’s decision to borrow $15 billion from the Chinese government, labeling the move as “frightening, scary and reckless,” particularly when he, Dr. Bawumia, criticized the Mahama government for contracting a much lesser amount.
According to him, the situation will leave worsen Ghana’s debt status which could seriously affect the country’s economic growth and development.
The Vice President, Dr. Mahamudu Bawumia, has announced that the government of China has agreed to commit 15 billion dollars worth of investment in Ghana.
Dr. Bawumia pointed out that, Ghana was able to secure the commitment due to a new financing model designed by the Economic Management Team.
But Speaking on Eyewitness News on Tuesday, the NDC MP chastised the Vice President, Dr. Bawumia for spearheading the agreement to contract the loan from the Asian country, despite he being a heavy critic of the erstwhile National Democratic Congress (NDC) government’s decision to contract a similar loan.
“We are dealing with a country where borrowing $1bn of Eurobond was described by Bawumia himself as very reckless borrowing and he put in perspective the GDP ratio when we were borrowing just $1bn. In the 2017 budget by this government, the debt to GDP of 72% was vilified as the worst this country could ever have, now to add $19bn of an additional loan in such a short period will push our debt to GDP to the region of 120% and 130% of GDP. That is the worst that you can find in the world,” he said.
“For a person like Bawumia to now be saying that we should be clapping for him for ditching us into 130% debt to GDP is frightening, scary and reckless,” he noted.
But the Deputy Finance Minister, Kwaku Kwarteng, discounted the claims saying that the government believes that conditions for the loan were appropriate.
He said although the modalities for the disbursement of the funds were yet to be drawn, the government is working to ensure that the interest of Ghanaians remain paramount.
Kwaku Kwarteng further discounted claims that the NPP government will exceed its debt to GDP target.
He said the government will be responsible for ensuring the country’s debt sustainability is within acceptable limits.
“It is not as though we said one thing to parliament and we are doing something different. Let not anyone suggest we said we will not borrow. I think the minority’s concern is a legitimate concern,” he said.
He, however said it was premature for the minority to raise concerns about the facility since the modalities and other details for the release of the funds are yet to be drawn.
China’s Eximbank in 2012, agreed a $3bn facility to the previous Mills and Mahama governments, but only $1bn was released after years of back and forth between the two countries.
By: Jonas Nyabor/citifmonline.com/Ghana