Bawumia deplores NDC’s fiscal mess
Dr Mahamudu Bawumia, the 2016 Vice Presidential Candidate of the New Patriotic Party (NPP), has said the 2015 budget demonstrates that the National Democratic Congress (NDC) Government has created a fiscal mess after six years in office but has no clue as to how to deal with it.
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Speaking at the UK Branch of the Young Executives Forum in Milton Keynes on Saturday, he said the government’s focus was on raising revenue to hide the fiscal indiscipline.
“It is clearly more of an expenditure mismanagement problem. The budget does not address expenditure review and re-composition and measures to ensure fiscal discipline, but rather focuses on the revenue side (raising more taxes), clearly being insensitive to the population and taxing them to hide inefficiencies”.
“There is a saying that “if all you have is a hammer everything begins to look like a nail!” This is so appropriate in the case of this NDC Government,"Dr Bawumia, who is the running mate to Nana Akufo-Addo, stated.
Concerning the US$1 billion Eurobond Ghana sold, the former Deputy Governor of the Bank of Ghana asked the NDC government to list the projects it was meant for all to see, since they appeared missing in the 2015 Budget.
Last September, Ghana sold a US$1 billion Eurobond, five days before talks began with the International Monetary Fund(IMF) for a possible financial bailout. The Finance Minister said at the time that a chunk of the cash raised was to develop the country’s infrastructure.
Dr Bawumia believes the $1 billion raised on the money market has been used to do nothing more than to artificially shore up the cedi from depreciating against major currencies.
He further disclosed how the government of the NDC had not used Ghana’s limited foreign exchange to invest in productive projects but to merely stop the local currency from sliding.
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According to the economist, the NDC had spent over $5 billion more in six years to sustain the cedi than the NPP did in eight years and yet the NPP did a far better job than the current government to stabilise the cedi.
Addressing the group of UK-based Ghanaian professionals at the breakfast meeting, Dr Bawumia disclosed, “We are reliably informed that the $1 billion raised from the sovereign bond has been used to reduce government’s indebtedness at the Central Bank and that the funds are not available anymore for the purpose for which it was raised.”
He stressed, “This is sad and raises a whole lot of credibility issues. How can we borrow such a huge amount to fill a gap at the Bank of Ghana, the central bank? Is this the use to which non-concessional borrowing should be put? This is a very serious development and the Government and Bank of Ghana should urgently comment on this.”
Nana Akufo-Addo’s running mate recalled how the government announced to the world that it was seeking the support of an IMF-supported programme to help address the current imbalances in the economy.
On the basis of this, he said the NDC government was able to calm the nerves of investors and issued a $1 billion sovereign bond.
He challenged the Finance Minister, Mr Seth Terpker, to show to Ghanaians that he had used the $1 billion for the purpose for which the bond was issued.
“In the prospectus that sought to convince investors,” he explained, “the Minister of Finance indicated that a substantial portion of the amount borrowed would be used for infrastructural development and critical projects. What projects did the Minister of Finance have in mind?”, Dr Bawumia queried.