Government’s Borrowing Spree Raises Concerns
Deputy Ranking Member of the Finance Committee and Member of Parliament for Tano, Dr. Gideon Boako, has sounded the alarm over Ghana’s rising domestic debt. He cautions that if the current borrowing trend continues, Finance Minister Dr. Cassiel Ato Forson could end the year with over GHS200 billion in new domestic debt, further straining the country’s fragile economy.
Speaking at a Minority press conference, Dr. Boako criticized the government’s excessive reliance on domestic borrowing, warning that it is unsustainable and could severely burden future administrations.
Alarming Debt Accumulation in Just Two Months
Dr. Boako expressed shock at the rate of borrowing within the first two months of the year, highlighting how quickly Ghana’s debt is ballooning.
“Ato Forson said the government has about GHS153 billion in interest payments on the domestic market to pay. That is what he says President Akufo-Addo has left for him. And he is going to pay about GHS70 billion next year and another GHS50-something billion the following year.”
However, despite these obligations, the government has already borrowed GHS73 billion in just two months.
“If Akufo-Addo, in eight years, has left you GHS153 billion in interest payments, and in just two months, you have borrowed GHS73 billion, then we have a serious problem.”
To make matters worse, he revealed that the government plans to borrow an additional GHS6 billion from the domestic market within days, bringing the total to nearly GHS80 billion in just two months.
The Implications of Excessive Borrowing
Dr. Boako warned that at this pace, Ghana’s domestic debt will spiral out of control, leading to an economic crisis that future governments will struggle to manage.
“We need to address this issue. If we continue on this path, by the end of the year, Ato Forson will have borrowed over GHS200 billion domestically. This is a major concern for Ghana’s economic future.”
He stressed that fiscal responsibility and prudent financial management are crucial to stabilizing the economy and preventing an economic disaster.
What This Means for Ghanaians
With rising debt levels, the government may be forced to impose higher taxes, cut public spending, or seek external financial bailouts. This could lead to:
- Increased cost of living due to inflationary pressures.
- Reduced public services as funds are diverted to debt servicing.
- Higher interest rates affect businesses and personal loans.