Editorial: Parliament must be cautious with approval of loans

Parliament reconvened on Tuesday for an emergency sitting, where six loans were approved. The House first approved US$60,600,000 as a Third Additional Financing for the Ghana Covid-19 Emergency Preparedness and Response Project.

The legislative house also approved an amount of US$150 million to finance phase two of the West Africa Food System Resilience Programme, and an amount of €170 million to support the establishment of a Development Bank of Ghana.

Additionally, an amount of US$30m to finance the Medical Equipment Provision Project in response to Covid-19 got the nod from the House, whilst an amount of US$150m to finance primary healthcare investment project was also approved, in addition to an amount of US$150m to finance the Public Financial Management for Service Delivery Programme.

Though we are not totally against contracting loans at this critical time, we are concerned with the development and support the Minority Members of Parliament (MPs) and other citizens, who insisted the loans should not have been approved at the time they did.

Much as the Minority side of the House cannot exonerate themselves because it was Parliament, as a whole, that approved the loans, we must also put it on record that they mounted a spirited campaign to shoot down the loans.

The Chronicle holds the view that, considering the bleak picture Parliament created on the state of the Ghanaian economy, we least expected the House to pass six different loans on the given day.

The Deputy Minister for Finance, Mr. John Kuma, was reported to have said that the loans were not new ones, but only needed Parliament approval.  Regardless of its status, these loans are in the long run going to further balloon our debt stock. We would appreciate a better explanation that would inform Ghanaians about the urgency of these loans, such that an urgent meeting of the august House had to be called, with its accompanying cost to the state.

The managers of the economy may mean well for the nation, but they must also be able to gauge the mood of the people before taking certain decisions.

How do you appeal to pensioners to help the government move out of its debt distress, and then turn around to borrow more?

By the time the House dissolved last Tuesday, it had approved $710 million with the six loans for the government.

We associate ourselves with the call by the Director of the Institute of Statistical, Social and Economic Research (ISSER), Prof. Peter Quartey, who urged Parliament to be cautious in approving new loans for the government of Ghana.

He made the call based on the same over-hang debt levels we are citing, arguing that it should be a cause of concern for all involved.

The Economist asked Parliament to demand details on loan agreements before approving them, and insisted that new loans must increase productivity.

We are of the view that Ghanaians must be aware of the type of loan to be approved and what it is going to be used for. And, most importantly, whether it would increase productivity and not go to consumption. Also, is it going to generate enough resources to pay back?

If the country has suspended payments on most of its external debts due to the restructuring to help solve our cavernous balance of payments deficit, then we must gauge our borrowing, so as not to add to our economic woes.

A word to the wise is enough!


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