A former Minister of Finance, Seth Terkper, has said that governments must pay for the loans it goes for instead of leaving them for successors to pay.
In an interview with Accra-based Citi FM, he conceded that “borrowing is inevitable” for governments but the borrower should not leave debts for subsequent governments to come and pay.
“It should be clear to all of us Ghanaians that now, no government can say that it will not borrow. I think it should be very clear to us by now,” he said, adding “If you must borrow then learn to pay for the loan. Don’t borrow and expect that another government will come and pay for it and this is what Ghanaians should expect from our government.”
He was commenting on Ghana’s debt stock which is currently at 68.3%. Speaking on how debts can be managed he said that “borrowing should be planned”.
He argued that parliament should take its role seriously in ensuring that the government borrows within a certain frame.
He stressed that governments should not borrow to spend on consumption but productive sectors that will help improve the economy and generate some revenue.
Ghana’s public debt stock is now GHS142.5 billion as of December 2017, the Bank of Ghana’s latest Summary of Economic Data has revealed.
The latest figure translates to a debt-to-GDP of 70 percent.
While external debt stood at $17.2 million representing 37 percent of the total debt stock as of December 2017, internal debt hit GHS66.7 billion, representing a Debt-to-GDP ratio of 32.7 percent.