Mahama administration has deceived Ghanaians — Bawumia
The running mate to the presidential candidate of the New Patriotic Party (NPP) in the 2012 elections, Dr Mahamadu Bawumia, has accused the President John Dramani Mahama-led administration of deceiving Ghanaians under the pretext of having undertaken massive and unprecedented infrastructure development, while in actual fact it had borrowed more but spent less.
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According to Dr Bawumia, the ruling National Democratic Congress (NDC) government led by President Mahama had borrowed USD$39 billion, while all the infrastructure development it had undertaken cost less than USD$7 billion.
He said a whopping USD$33 billion of the money meant for the betterment of the lives of Ghanaians had gone missing and asked: “Where is the money?”
This was contained in a lecture delivered by Dr Bawumia on the topic: “The State of the Ghanaian Economy: A Foundation of Concrete or Straw” in Accra yesterday.
Weak foundation of straw
He said the foundation that the Mahama administration had laid was “a weak foundation of straw” based on a rule characterised by “mismanagement, incompetence and corruption”.
He said the difference of USD$33 billion that was unaccounted for had been siphoned by operatives of the NDC government through over-pricing of contracts, corruption and the absence of value for money in the administration of the national economy.
Dr Bawumia claimed that strangely, Ghana under President Mahama was dolling out more in the payment of interest on loans than it spent on infrastructure projects annually.
Unprecedented borrowing
The norm, he said, was to have an ideal situation where infrastructure expenditure would be above interest payments, adding that with the unprecedented borrowing and high debt levels, the country was saddled with high interest payments.
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In 2015 alone, he said, interest payment stood at GH¢9.6 billion, which was more than the total debt of Ghana at the end of 2008.
“The data also show that during the NPP period of governance, capital expenditure far exceeded interest payments. This is because low interest payments allow more room for more capital expenditure,” he said.
Explaining further, he said infrastructure expenditure as a percentage of gross domestic product (GDP) declined sharply after 2008, as interest payments increased.
“How can an economy be on an upward path when interest payments exceed infrastructure expenditure?” he asked, and described the situation as being a result of the NDC’s economic mismanagement.
Spending more on interest payments
He said not only was the country spending more on interest payments than on infrastructure; it was also spending more on interest payments than the total value of its key agricultural production, such as cocoa, livestock, fishing, forestry and logging put together.
Dr Bawumia observed that the country’s total debt had ballooned from GH¢9.5 billion to GH₵105 billion at the end of May 2016.
“The real effect of the reckless borrowing undertaken in the last seven years is seen in the magnitude of interest payments Ghana has been burdened with, which has meant that vital resources which should have gone into vital sectors, infrastructure development and social services are now being pumped into settling debt obligations,” he said.
“Interest payments in 2016 of GH¢10.5 billion will be five times what was allocated to six key ministries combined. As interest payments go up, the space for development shrinks, and this is all due to financial indiscipline,” he added.
Dr Bawumia further said interest payments on the debt stock in 2015 were six times Ghana’s oil revenue and added that “the oil discovery has basically been compromised over the last seven years by the government’s recklessness and incompetence”.