Government Chases More Loans

The government has laid before parliament another €23.5 million loan agreement for purported construction and equipping of 10 polyclinics in the Central Region.

The loan agreement between the government and the Raiffeisen Bank International AG of Austria, was laid in the house yesterday by the Minister of Employment and Labour Relations, Haruna Iddrisu, on behalf of the Finance Minister who was said to be on an official trip with the president to India.

In addition to this, the government is also asking parliament for a waiver of import duties, import VAT, Import National Health Insurance Levy, EDAIF, ECOWAS Levy, destination inspection fees and withholding tax liabilities on project equipment and materials and other project-related imports amounting to €3.4 million in respect of the said project.

The loan agreement has been referred to the Finance Committee for consideration.

The new loan agreement has raised eyebrows on the minority side, with deputy minority leader, Dominic Nitiwul, saying that the way things are going he would not be surprised that by the time the ruling National Democratic Congress (NDC) exits power in January 2017, Ghana’s total debt would have ballooned to a whopping GH¢110 billion or more, as predicted by Nana Akufo-Addo – from the GH¢9.5 billion that the present government met in 2009 when it took over power from the New Patriotic Party (NPP) administration.

According to the deputy minority leader, who spoke to a section of the media after yesterday’s sitting, the worrying situation is that by a year or two, the biggest item on the country’s budget will be debt repayment or debt servicing.

“How can this government spend so much above what the country generates and what is the point in starting new projects or promising new projects when you know very well that you don’t have the resources to complete those projects?” he queried, saying that it had got to a point that the government has to borrow to be able to pay salaries of workers.

Mr Nitiwul, NPP Member of Parliament for Bimbilla, indicated that the recent $1 billion Eurobond that had been secured by the government would be used to solely service the country’s debt.

“The IMF has directed that all the $1 billion has to be used to pay some of our debts,” he said.

According to the deputy minority leader, the worrying aspect of government’s borrowing is that the NDC government has found an ingenious way of side-stepping parliament to borrow from the domestic market by floating bonds and issuing treasury bills because parliament cannot have a means of knowing what the government is using that domestic loan for and how it is going to pay those loans.

The MP for Twifo Atti Morkwa in the Central Region, Samuel Ato Amoah, told DAILY GUIDE that he was very happy that the government was going for the loan to improve health facilities in the region.

He said the polyclinics would help ease the pressure on the government hospitals in the region.

By Thomas Fosu Jnr

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