Gov't had no choice; Agyapa Mercer on why borrowing was Ghana’s only option

The Member of Parliament for Sekondi and Minister of Tourism, Arts and Culture, Andrew Egyapa Mercer has defended the government’s borrowing strategy, stating that all investments made by the current administration were funded through debt, as Ghana’s fiscal space remains heavily constrained.

Mr Mercer made the remark in a media interview after President Nana Addo Dankwa Akufo-Addo’s presentation of his message on the State of the Nation in Parliament on December 3, 2025.

President Akufo-Addo had highlighted the challenges faced by Ghana, particularly the economic difficulties inherited from the previous administration.

Mr Mercer speaking to the media said Ghana’s tax revenue, nearly 99.7%, was consumed by debt servicing, public sector wages, and statutory payments, leaving little room for development.

He stressed that without borrowing, the government could not have made critical investments, particularly in the energy and banking sectors, which were plagued by longstanding issues.

“The government didn’t have a choice but to borrow,” Mr Mercer said, defending the administration’s fiscal decisions. “We inherited an economy where nearly all of our revenue was spent on debt service, salaries, and statutory payments. Every other investment had to be funded through debt,” he said.

The Sekondi MP who lost the December 7, 2024 parliamentary election and will not be retaining to the House in the 9th Parliament also pointed to external shocks that compounded the country’s fiscal challenges, notably the COVID-19 pandemic and the ongoing Russia-Ukraine war.

He noted that the pandemic exacerbated an already struggling economy, leading to increased borrowing to address urgent issues.

Furthermore, the war caused a sharp rise in global freight costs, significantly impacting Ghana’s import-dependent economy.

Mr Mercer also criticised the opposition’s rejection of revenue measures, particularly the e-levy, which he argued triggered a series of negative consequences, including credit rating downgrades and capital flight.

He also expressed dissatisfaction with Parliament’s failure to pass the necessary revenue measures on time, citing this as a breach of the Public Financial Management Act.

“The opposition approved the budget and appropriation but rejected the revenue measures,” Mr Mercer said. “That led to a downgrade, capital flight, and inflation. There were clear consequences for the economy.”