What has the Debt Stock Accumulated To Date Been Used For? Ladies and Gentlemen of the Media, another familiar refrain these days has been: “Show us what all those debts approved have been used for.” And this request is coming from a political party that spent 8 long years in government and whose leading members were in both the executive and the legislature. In the first place, though they very well know that a loan approved in parliament does not mean a loan disbursed, they deliberately mislead the people of Ghana by throwing about the total loans approved in parliament and asking where the projects are even though they are aware that even as at 2012 there are still loans contracted way back in 2006 that have still not been fully disbursed and therefore completed projects from such undisbursed loans could not be shown. They also deliberately ask to see the projects even though they know that not every loan approved goes into visible infrastructural projects like roads- this is because many loans go largely into building the critical institutional and systemic capacity needed to achieve optimum returns for the country. They also do know that many projects do take years to complete as can be seen from example of the recently commissioned N1 Highway that took almost four years to complete. But the proof of some of the things we used the loans for abounds. Huge part of the loans we borrowed domestically have been used to among others, pay off the hydra headed TOR debt the NPP left behind, pay the huge road and non-road arrears left behind by the NPP and notably cover the shame of the NPP in starting major road projects, aka the Gang of four roads without even having the presence of mind to secure a stable source of financing for the projects. We will also before long at a future press conference that will deal with social and economic infrastructure, give extensive information on many of the physical projects that other loans contracted are being used for. Ladies and Gentlemen of the Media, in addition to all this has been the astute debt management that has been deployed under President Mills’ leadership that has made cost of domestic borrowing become cheaper with the 91 day T- Bill dropping to a historic 9.1 percent by the close of 2011. There has also been a systematic program to de-emphasize shorter dated government paper and shift more towards the 3 and 5 year bonds, which give the nation some vital savings. This correction of the yield curve has also prepared the nation towards the successful future floatation of 7 year and possibly 10 year government bonds and the establishment of the critical benchmark that will make the corporate sector float similar long term bonds; which development holds transformational promise for Ghana because the raising of long term capital to power the long term needs of our country remains one of the key challenges to overcome.
Posted on: Sat, 26 Jul 2014 11:00:04 +0000
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