The National Democratic Congress (NDC) in its 2020 manifesto has promised to invest over $10 billion in an accelerated infrastructural development plan.
The NDC through the Big Push agenda, also seek to create some 1 million jobs for Ghanaians.
The governing New Patriotic Party (NPP) on the other hand also announced the Ghs 100 billion Ghana CARES ‘Obaatanpa’ Programme to further mitigate the impact of Covid-19 on businesses and accelerate recovery of the pandemic-hit economy.
On the back of the two flagship promises made by the two political parties, analysts have expressed worry over the enormous additional debts the manifesto promises will add to the already high-risk-debt-distressed Ghanaian economy.
Ghana’s debt-to-GDP currently stands at 68.3 per cent, representing some 263 billion cedis. Government has also exceeded its Covid-19 revised fiscal deficit target of 7.2 by 0.2 per cent more.
Additional debts to the existing debt stock however, does not seem to be the view of both former Finance Minister and lead partner of tax firm, PFM Tax Africa, Seth Terkper and the Deputy Finance Minister, Kwaku Kwarteng.
In a discussion on the nation’s debt stock on TV3’s The Key Point monitored by norvanreports, Mr Terkper asserted the NDC’s Big Push agenda will not add to the nation’s existing stock, as the party will finance the agenda using the Contingency or Sinking Fund when it comes to power.
According to the former Finance Minister, the NDC prior to losing power to the NPP in 2016, properly structured debts accrued from bonds meant for infrastructural development.
Mr Terkper posits that the debts incurred by the NDC government were then allayed by interests accrued on invested excess oil revenues transferred into the Sinking Fund from the Ghana Stabilization Fund.
He further argues that, the same approach along with other investment methods will be adopted to fund the Big Push Agenda, thereby having no additional debts to the already huge debt stock.
Speaking for the NPP, the Deputy Finance Minister, Mr Kwarteng also noted that, the Ghana CARES programme is not going to further worsen the country’s debt stock as a majority of the needed funds – 70 per cent of the Ghs 100 billion – will be provided by the private sector with Government providing the remaining Ghs 30 billion.
According to Mr Kwarteng, Government still has enough fiscal space to inject the intended Ghs 30 billion into the Ghana CARES programme without further inflating fiscal deficits and returning to the IMF.