Dr Bawumia

The vice presidential candidate of the New
Patriotic Party (NPP) Dr Mahamudu Bawumia
has fired salvos at government officials,
describing them as people who “do not read.”
The former deputy governor of the Bank of
Ghana was reacting to a statement from the
Minister of Communication Dr Edward Omane
Boamah, purporting to respond to issues
raised by Bawumia during a lecture at the
University for Development Studies, Wa
Dr Boamah described as “false and misleading”,
claims by Dr Bawumia that the governing
National Democratic Congress (NDC) party has
among other things increased Ghana’s debt.
“It is instructive that after years of living in
denial that these projects exist, he has finally
acknowledged their existence except that he
wants to tread down the path of discrediting
them for partisan gain,” Dr. Boamah added.
However, in a Facebook post on Wednesday, Dr
Bawumia said: “What is clear to me (and
confirms my long held suspicion) is that
members of this government, handed the
mandate to manage our destinies as a nation,
do not read. Worse of all, as I said on 14th
February, 2015, at a forum at the University
for Development Studies, what is most
unfortunate about this whole episode is the
fact that the government doesn’t even seem to
know how much it has borrowed.”
Below is his full statement:
I have just read a statement from the Ministry
of Communications purporting to respond to
the issues I read at the University for
Development Studies, Wa Campus concerning
the propagandist claims of the current
government on infrastructural investments
under their administration.
1. Debt Figures
What is clear to me (and confirms my long
held suspicion) is that members of this
government, handed the mandate to manage
our destinies as a nation, do not read. Worse
of all, as I said on 14th February, 2015, at a
forum at the University for Development
Studies, what is most unfortunate about this
whole episode is the fact that the government
doesn’t even seem to know how much it has
borrowed. I have on several occasions tried to
educate the government on what the true
value of their borrowing is but try as I do, it is
clear the government is committed to either
not reading and understanding the extent of
their reckless borrowing or is only following
their usual path of deceit and propaganda.
For the benefit of the people of Ghana, I
reproduce my comments on this issue
contained in the NPP’s Response to the 2016
Budget, delivered on 2nd December 2015 and
pray that this time, members of government
will read and be informed.
“In the last seven years alone under this NDC
government Ghana’s total debt has ballooned
from GH¢9.5billion to a projected GH
¢99billion by the end of 2015! Of this, GHC54
billion ($14 billion) is external debt and GH
¢45 billion is domestic debt. What is clear is
that 90% (i.e. GH¢89.5 billion) of Ghana’s
total debt since independence has been
accumulated under this NDC government
between 2009-2015.
It is also important to appreciate the quantum
of borrowing that has actually taken place in
the last seven years to set the record straight.
In US dollar terms, this NDC government has
borrowed the equivalent (at the time of
borrowing) of about $37 billion in seven
years!! (Table 2).
Table 2. (attached) shows the Dollar Value of
Government Borrowing (2009-2015) – Billions*
Contrary to what the government will have us
believe, exchange rate depreciation has rather
reduced the book value of Ghana’s debt in
dollar terms. So that even though government
has borrowed the equivalent of $37 billion in
7 years, the book value of the debt would be
some $26 billion (GH¢ 99 billion) by the end
of 2015. It is important to understand this
point because it appears that this government
does not.
Take the following example. Assume that today
the exchange rate of the cedi to the dollar is
1:1. If you borrow GHC100 today, it would
mean that you have borrowed the equivalent
of $100 dollars and you should be able to do
projects worth $100. In a few years time if the
exchange rate depreciates to 4 cedis to one
dollar, then the 100 cedis you borrowed a few
years ago would be worth some $25 today.
This does not however mean that you did not
borrow the equivalent of a $100 dollars
initially and we should expect to see a $100
worth of projects. You cannot suddenly claim
that you actually borrowed $25 a few years
ago and so you are only to account for $25
worth of projects. Using current exchange
rates in determining the equivalent amount
borrowed in the past is misleading because it
ignores the value of the debt at the time it was
borrowed. Using current exchange rates would
underestimate the value of the borrowing
because of exchange rate depreciation. We are
here concerned about the value of the projects
that could have been financed at the time the
money was borrowed.”
Giving the rate of borrowing by this
government, it is likely that the total debt at
the end of January now exceeds the GH
¢99billlion, projected for the end of 2015.
It is interesting to note that according to the
Minister of Finance in his 2015 Mid-Year
Review, “Ghana’s total public debt stock as at
end-December, 2014 stood at GH¢79,665.5
million……….In dollar terms, the debt stock
was US$24,817.1 million, representing an
increase of 3.3 percent from the end-2013
stock of US$24,021.2 million.”
Amazingly, after adding some GHC20 billion to
the debt stock in 2015 alone, the Government
still wants to insist that the value of borrowing
they have done, in dollar terms, has actually
decreased. This exposes the deception in the
method the government is applying on our
debt stock, in attempt to hide the real value of
monies that have accrued to them.
2. Capital Expenditure Numbers
One other lie told by the government in the
release put out by the Minister of
Communications, was the false claim that
Capital Expenditure averaged 5.6 between
2001 and 2008. I doubt the Finance Ministry
handed these figures to the Minister but
whatever be the case, it exposes the level of
incompetent and deceitful governance we have
It is critical as I keep saying that in matters of
governance, we strive to attach the highest
levels of credibility especially when this path of
deceit and propaganda has landed us at the
doorsteps of the IMF for policy credibility.
This data and the admission by the government
today that ‘Capital Expenditure is within a
5.6% band’ confirms and vindicates my
position, as I have repeated over and over,
that this government is investing about half
what the previous government invested in
I will repeat again that it is in fact a travesty
that Ghana before the discovery of oil was
spending a higher proportion of its income on
infrastructure investment than after the
discovery of oil and the massive increase in
the debt stock.
3. Projects and Investment
Reading the government’s response, it is clear
that they have not added anything new to the
claims they were making to which I responded
on Saturday. All they have done is to repeat
the same claims which have been discredited.
For me, the people of Ghana remain the best
judges on the issue of whether they have had
their due from this government considering
the unprecedented resources and opportunities
they have had since they won power.
After having more than 10 times the resources
of the NPP through unbridled borrowing,
astronomic increases in tax rates and
favourable external conditions (which they did
nothing to precipitate), the people of Ghana
will judge if such huge resources have been
invested in their lives.
I remain convinced that the people of Ghana
will judge and judge well. This conviction is
strengthened on a daily basis as I go round the
country and interact with the people of Ghana.

Source: starfmonline

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