Haruna Iddrisu, the Member of Parliament (MP) for Tamale South, has put up a daring idea to limit government borrowing to 70% of GDP.
If put into effect, this action would severely limit the government’s capacity to incur additional debt.
“This parliament must sit up and we must sit up to demand a feeling for good for all presidents and governments. I maintain that no president or government should be allowed to borrow beyond 70% of GDP,”
he stated on Thursday during a discussion about the Finance Ministry’s budget allocation.
The former Minority Leader demanded a forensic probe of the Finance Ministry’s debt to State Owned Enterprises (SOEs) in addition to recommending a borrowing cap.
He named Ghana Gas, ECG, and NCA in particular as companies that the Ministry of Finance could be heavily indebted to.
“I am asking for a forensic audit as to how much money the Ministry of Finance has held on state-owned agencies, Ghana Gas, ECG, NCA. Those of them who have other holding that the office of the Chief of Staff has taken money away from them. We need to know,”
He stated. The World Bank reports that while debt service-to-revenue reached 117.6% in 2022, Ghana’s public debt increased from 79.6% of GDP in 2021 to over 90% of GDP in 2022.
Ghana’s amount of debt makes the nation susceptible to economic shocks and raises questions about its capacity to pay its debts back.
