The Former President, John Dramani Mahama, has suggested that the government should immediately enter into negotiations with the country’s multilateral partners, with the view to engaging creditors to ease and restructure debt servicing.
That, he noted, would help give the country the respite it desperately needed at this point in time.
It will also enable the government to provide the needed resources to address the needs of the citizenry.
Mr Mahama was speaking as the guest of honour during the inauguration of Think Progress Ghana, a policy think tank, in Accra yesterday (June 30, 2022).
He also proffered what he described as “Presidential tool kits” to enable the current government to address the economic challenges the country found itself in.
They include dismissing the current Finance Minister, Ken Ofori-Atta, the need for President Nana Addo Dankwa Akufo-Addo to address the nation on the current state of the economy to rally the support of Ghanaians as the government found ways of addressing the crisis, and reshuffling the ministers in the government to improve performance.
Equally important, he observed, was for the government to bring together all the best brains in the country to find ways of navigating the country out of its huge debt burden and to ensure a more comprehensive debt restructuring regime.
The former President equally suggested the need for the placement of a moratorium on new non-concessionary borrowing as a way of halting the rapid rise of “public debt beyond unsustainable levels”.
“Ghana cannot wait for the International Community to come with new programmes to help it out of this situation because debt restructuring has become unavoidable and we must avoid the unbridled borrowing,” the former President stressed.
Mr Mahama was of the view that the current government had “shown no inclination” towards accepting suggestions towards mitigating the negative impact of the economic crisis on the citizenry in spite of the fact that “it also has no clear credible plan to deal with the current situation”.
Rather, he noted, the government had resorted to borrowing more and if the “public debt gets out of hand it will wreak further havoc on the economy”.
Former President Mahama recalled recent steps by the Minister of Finance to seek Parliamentary approval to borrow about $1 billion.
He said it was an “inimical step” taken by the Finance Minister at a time when the country’s debt portfolio had hit about GH¢400 billion.
On debt servicing, the former President intimated that tax revenue was projected at GH¢14.6 billion for the first quarter of the year but the government could only mobilise GH¢12.8 billion.
The amount collected, he stressed, could not, however, meet the country’s first quarter debt servicing amount of GH¢13.9 billion, meaning all the revenue bagged, if channelled into servicing the debt, would be inadequate.
Mr Mahama said such a situation affected the government’s ability to pay salaries and wages, provide textbooks, teaching and other learning materials for schools as well as meet some statutory payments, which were in arrears such as the District Assemblies Common Fund (DACF) and the National Health Insurance Scheme (NHIS).
Touching on the Electronic Transfer Levy (E-Levy), former President Mahama described it as “a spectacular failure and has become the mother of all nuisance taxes”.
Supporting his claim with figures, Mr Mahama said figures available to him indicated that in May, the country bagged only GH¢54 million as against a targeted GH¢474 million, representing 11.3 per cent.