The Minority spokesperson on Finance, Cassiel Ato Forson has warned that doom will befall the economy if government goes ahead with its planned issuance of a century bond worth $50 billion.
The act, according to him, would deteriorate exchange rate, weaken balance of payment, and cause a rise in the country’s interest rate.
In a statement issued yesterday, he said “I find this idea of floating a $50 billion Century Bond by this Government rather puzzling. It was this same Government that rejected a 40-year Development Plan aimed at putting the country on the path of prosperity and long term development, on the pretext that the planned period was too long. Now the Government is considering committing a sovereign nation to a 100-year bond.”
His response follows after President Akufo-Addo during a state visit to China, announced that government is considering floating a $50 billion Century Bond to provide resources to finance infrastructural and industrial development projects in the country.
Describing the move as puzzling, he stated that the country already has a 70 percent projected debt to GDP and would increase to 180 percent if government goes ahead to issue the $50 billion bond.
According to him, “an additional debt of this magnitude will completely crush the already fallible Ghanaian Economy.”
The former Deputy Finance Minister argued that the country’s projected tax revenue to GDP ratio of which stands at about 16.9 percent, is enough for debt servicing and payment of wages and salaries.
He further called on the President not to hang on Ghanaians an everlasting bond of 100 years.
“Mr. President, a good father leaves a good inheritance. Let posterity vindicate you and not victimize you. Please don’t leave us with this huge debt,” he warned.
Meanwhile, Information Minister Designate, Kojo Oppong Nkrumah has refuted calls from the minority.
He said the move to issue a century bond in the future is aimed at accelerating the infrastructure development of the country.
“There is a proposal for the administration to consider a century bond as has been done for example by China, Argentina, Austra, Ireland and even Mexico which provides ultra-long term financing at low rates and helps you to principally refinance our current debt stocks but also provides financing for some of the major items that we intend to embark on; railway, regional intercity motorway, things like the regional airports. Industries that require financing as well and at this stage, this proposal is being considered,” He explained in an interview on Citinews.
Ghana last week signed eight Co-operation Agreements and Memoranda of Understanding with China, in different sectors of their respective economies, aimed at deepening the ties of co-operation and the bonds of friendship that exist between the two countries.
The agreements were signed on President Akufo-Addo’s state visit to China where he held bilateral talks with that country’s president.
By: Emmanuel Yeboah Britwum