Dr Cassel Ato Forson, Ranking Member on Finance has stated that Ghana’s public debt is estimated to hit 90 percent of Gross Domestic Product (GDP) by the end of 2022.
“Mr Speaker I won’t be surprised that by the year 2023 our debt situation would be 100 percent of our GDP, that is where we are…. this budget brings no hope for the people of Ghana.”
Dr Forson made the comment when the House started the debate on the 2022 Mid-Year review budget and economic policy of government with both Majority and Minority sides holding on to their partisan positions.
Finance Minister Ken Ofori-Atta on Monday, July 25, 2022, presented 2022 Mid-Year budget review and economic policy of Government in Parliament.
The mid-year budget presentation is in fulfilment of section 28 of the Public Financial Management Act, 2016 (Act 921) and Regulation 24 of the Public Financial Management Regulations (L.I.2378).
Dr Forson also accused the Bank of Ghana (BoG) of engaging in the illegal printing of 22 billion cedis without recourse to Parliament.
He explained in the 2022 budget the government projected not to borrow any money from the Central Bank, only for them to see in the same document that between January to June this year the government have taken over 22 billion cedis from Bank of Ghana (BoG).
“Mr Speaker, when the Central Bank or BoG gives money to the Government of Ghana in economics it is call printing of money,” he added.
Dr Forson further cited for example that section 30 of BoG Act 612 as amended states that total revenue advances, purchases of treasury bills and securities made under subsection 1 shall not at any time exceed five percent of total revenue of the previous fiscal year.
“Mr Speaker the previous total revenue for the fiscal year was 70 billion cedis and five percent of 70 billion is about 3.5 billion cedis…they have taken 22 billion cedis without parliamentary approval,” he said.
However, Dr John Kuma, Deputy Minister for Finance, rejected the claim by Dr Forson that the BoG was engaged in illegal printing of money.
He argued that section 30 of the BoG Act states clearly that it is within the remit of the law for BoG to grant overdraft and support to central government without printing money.
He said the Finance Minister right from beginning of the year made it clear to the House to ensure fiscal consolidation to reposition the economy from the difficult condition the country finds itself.
Dr Kuma also stated the government in the 2022 budget announced that there would be a fiscal deficit of 7.4 compared to the 9.4 percent deficit last year.
He said in furtherance to that the government announced 30 percent discretionary cut in fiscal activities.
“Mr Speaker, that this is reflected in the mid-year budget, where the fiscal deficit has been reviewed downwards to 6.6 percent. That is an indication that the government is committed to ensuring that indeed the fiscal consolidation and the measures put in place to ensure we bring down debts to sustainable level are achieved,” Dr Kuma said.