Drop In Gold, Cocoa Prices Responsible for Govt Borrowing � Amissah Arthur
The Vice-President Amissah Arthur has said that the drop in the world prices of the country’s two main export commodities was the reason for government’s extensive borrowing.
Several groups, including the minority in Parliament and Pressure group Occupy Ghana have criticized government’s borrowing in recent times, describing it as excessive. NPP’s vice presidential candidate in the 2012 elections, Dr. Mahamadu Bawumia has previously stated that Government’s continuous borrowing was needless and could affect Ghana’s rating and threaten the stability of the banking industry.
However, according to the Vice President, the fall in the prices of Gold and cocoa caused a significant reduction in the government’s revenue, forcing them to turn to external financiers in order to complete certain vital development projects.
“Currently we are going through some short term difficulty because the [prices] of the primary commodities that we produce and export went down significantly and therefore created difficulties for us,” Amissah Arthur said.
“We have significant need for investment in infrastructure but with the decline in our earnings, we could not postpone the development of that infrastructure and so it went ahead with some external borrowing to make sure we could finish those projects and that led to fiscal deficit which we are dealing with now,” he added.
Amissah Arthur made these comments when a business delegation from the Flanders Investments and Trade group of Belgium paid him a visit at the Flagstaff House in Accra.
He stated that despite the current problems with the fiscal deficit, Ghana’s medium-term economic prospects remain bright due to gains being made in the oil sector and in power generation.
“We found some petroleum resources off shore Ghana which we started producing 3 years ago and have since seen significant yield. In gas, we have a prospect for helping to reduce the cost of power generation. And also hopefully some other products in fertilizer and so which are prospects we are looking at,” he opined.
<<Print>>