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Budget deficit reduced by 3.9% and you say what? -Afenyo Markin

botchway June 20, 2019

By Agnes Ansah

Mr Alexander Afenyo Markin, Member of Parliament (MP) for Effutu Constituency, has said the Akufo-Addo government has been cautious and prudent in its expenditure by reducing the national deficit from 6.5% in 2016 to 3.9% in 2018.

He indicated that in spite of the huge sums of money being spent in the implementation of the the Free Senior High School policy, the government has managed to reduce the deficit to 3.9% and should be commended.

“In 2016, [the] deficit was 6.5%, but it had reduced to 3.9%, this shows that the Akufo-Addo government has been more prudent, reasonable, and more cautious in terms of its expenditure, in spite of the implementation of the free SHS, which is benefiting everybody.”

Mr Markin made the comments in the House when the Finance Committee of Parliament presented its report on the 2018 Annual Public Debt Management.

The 2018 Annual Public Debt report covers broad debt management operations in 2018, and is intended to enhance transparency in Ghana’s public debt management, as well as updating stakeholders and the general public on key developments in the national debt management front.

It is also to disseminate information on Ghana’s public debt portfolio and debt management activities carried out over the past year to stakeholders, including lenders and investors in government securities as well as the general public.

The broad areas covered by the report, in accordance with the section 72(1) of the Public Financial Management Act 2016 (Act 921), include borrowing and other government debt management operations, guarantee and lending activities of the government, and other finance arrangements entered into by government.

It also looks at the debt management strategy and the rational for the strategy, list of outstanding government debts, list of outstanding government guarantees, the amount and beneficiaries of the guarantees, and an assessment of fiscal risk embedded in the guarantees.

Mr Markin indicated that the Minority in Parliament had created an impression that the Ghanaian economic situation is worse, but it is important to point out that the National Democratic Congress (NDC) went to the International Monetary Fund (IMF) in 2015 for policy credibility.

He said their purpose was to restore debt sustainability, restore micro economic stability, restore the country to high growth, and create jobs for the country, but they were told by the IMF that “it was as a result of their reckless spending of the oil revenue that had resulted in they running to them, and they did not dispute that, so why are they saying this current economy is bad?

He said page twelve of the report indicates that the Ghana’s return to the international debt capital market earlier in May 2018 grew very popular, with international institutional investors allowing Ghana to print two billion dollar 10 and 30 years amortisation bond, which was the country’s largest transaction.

“This enabled the country to, for the first time, issue a bond beyond ten years.

“You couldn’t do all these things and you want to say that we are in a state of hopelessness, there is no future?” he quizzed.

He also spoke about the debt to GDP, and said that the in 2015, the debt to GDP ratio was 56.8%, and now, after rebasing, it is 54.7%, therefore, the New Patriotic Party (NPP) government had done well.

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