Government’s borrowing capacity needs to be checked

The Member of Parliament (MP) for Tamale South, Haruna Iddrisu has advocated for a decisive measure to limit government borrowing to 70% of the Gross Domestic Product (GDP). This proposition, if adopted, would significantly curtail the government’s capacity to incur new debts.

Addressing his colleagues during a parliamentary debate, Iddrisu emphasized the need for parliament to be proactive in carrying out its mandate, asserting, “This parliament must sit up and we must sit up to demand a feeling for good for all presidents and governments. I maintain that no president or government should be allowed to borrow beyond 70% of GDP.”

In addition to the borrowing cap proposal, the former Minority Leader urged for a forensic audit into the Finance Ministry’s indebtedness to State Owned Enterprises (SOEs). Specifically naming entities such as Ghana Gas, ECG, and NCA, he called for a detailed examination into the financial interactions between the Ministry of Finance and these state-owned agencies.

“I am asking for a forensic audit as to how much money the Ministry of Finance has held on state-owned agencies, Ghana Gas, ECG, NCA. Those of them who have other holding that the office of the Chief of Staff has taken money away from them. We need to know,” he emphasized.

The proposal comes on the back of a data from the World Bank, which revealed that Ghana’s public debt surged from 79.6% in 2021 to over 90% of GDP in 2022, with debt service-to-revenue escalating to 117.6%. This unsustainable debt level raises concerns about Ghana’s capacity to meet its financial obligations and heightens vulnerability to economic shocks.