Former Finance Minister, Seth Terkper, says the actual debt of Ghana is not reflected in the country’s total debt stock published by the Bank of Ghana.
This comes after the BoG in its Summary of Economic and Financial Data pegged the country’s total debt stock by March 2020 at GHC236.1 billion, representing 59.3 percent of GDP.
However, Mr. Terkper in an interview accused the BoG of underreporting the figures.
“They used the GDP figure that was used in the 2020 budget to express the new level of debt as a percentage of GDP and that gives you 59.3 percent,” he said.
The former finance minister argued that the figure is different from what was presented to the IMF which puts Ghana’s debt at GHC236.1 billion.
Mr. Terkper added that the BoG should have published the debt stock as was presented to the International Monetary Fund (IMF) recently when the government applied for the IMF’s emergency COVID-19 fund.
“The Public Debt cannot be 59.3 percent at the end of March 2020 unless BoG is keen to continue the controversial “parallel” fiscal reporting that it denied” Mr. Terkper stressed
He said the misreporting debt figures will create policy credibility issues and also throw the budget out of gear since the economy will not be able to support projections made by the government.
“The issue is key since it affects the financing of the Budget that Parliament approves—as an outcome of the budget deficit, borrowing, and amortization of debt.”
Collapse Financial Institutions
former Finance Minister, Seth Terkper, believes that the Akufo-Addo government has no excuse for not paying customers of the collapsed financial institutions because of the opportunities afforded by the Energy Sector Levy Act (ESLA) fund.
According to him, the Energy Sector Levy was expected to generate GHS28 billion by 2022.
Mr. Tekper argued that this could be used to settle the aggrieved customers, in line with a promise by President Akufo-Addo.
“If we are talking about the payment of GHS5 billion, GHS10 billion or even up to GHS 15 billion or even GHS20 billion, there should be enough money in the ESLA fund to have paid the depositors their full amount.”
“The question is where did the government get the money ” Mr. Terkper added
Mr. Terkper said the Mahama administration used funds from the Energy Sector Levy to bolster the financial sector.
“Therefore it is erroneous to give the impression that the former administration did not do much about the financial sector situation.”
He recalled that there was some restructuring in 2016 by NDC costing GHS2.2 billion as well as an injection of GHS250 million.
“It was negotiated directly with the banks and for all that we know, no haircuts were made to depositors.”
The financial sector clean-up commenced by the Akufo-Addo administration in August 2017, has led to the collapse of nine universal banks, 347 microfinance companies, 39 microcredit companies or money lenders, 15 savings and loans companies, eight finance house companies, and two non-bank financial institutions.
Story by Naa Anyema Collison