‘Gov’t Borrowing Not Benefitting Poor, Businesses’

Member of Parliament (MP) for Obuasi West, Kweku Kwarteng has indicated that government’s penchant for borrowing will only impose hardship on the poor and make it difficult for businesses to thrive.

Mr Kwarteng disclosed this to BUSINESS GUIDE in an interview following the recent request by Finance Minister Seth Terkper to Parliament to approve an additional GH¢1.89 billion for government.

“Where will this additional money come from? Government says that the money will come from the energy sector levies. But that will still not be enough so they will go and borrow to make up the difference.

No solution to dumsor

He said “in spite of all these, there is no assurance in the supplementary budget as to when ‘Dumsor’ will end so that businesses can operate smoothly and create jobs.”

There is no assurance that the high electricity tariff would go down, there is no assurance that lending rates will come down so that businesses can borrow and expand to create jobs. There is no assurance that cost of living will go down. There is nothing!”

Misleading commendation

Despite appealing for more funds since the start of the year, he said government had failed to improve the livelihood of many Ghanaians.

Borrowing galore

At the beginning of 2016, government sought parliamentary approval to spend some GH¢50 billion and that was granted.

On 25th July, this year, it called for additional funds.

Government is seeking to reduce pensions to elderly men and women, gratuities and social security payments by GH¢293 million.

Also, it wants to reduce capital expenditure by some GH¢284 million.

“That is to say, government is seeking to reduce spending on roads, schools, hospitals, and other infrastructure projects by GH¢284 million,” the MP explained.

Also, he said government wants to cut spending on the provision of goods and services to Ghanaians by GH¢410 million and that includes money to buy chalk for basic schools, sanitation services, among others.

Government additionally wants to reduce transfer into the National Health Fund by GH¢19.6 million.

Mr Kwarteng stressed: “After reducing all these services to Ghanaians, government says it will still have problems unless Parliament approves for them an additional GH¢1.89 billion on top of the money given them at the start of 2016.”

Legacy of debt

Government has increased the country’s debt to GH¢105.1 billion, representing 66.4 percent of debt-to-GDP as at May, this year.