In Ghana, it has lately been fiercely argued by some Members of Parliament and opinionated academics that the nation is on the slippery slope to, or already inextricably mired in, the category of the Highly Indebted Poor Countries (HIPC). Ghana, they argue, is completely engulfed by a national debt exceeding about 75% of her Gross Domestic Product (GDP).
They aver that any country with a national debt of both internal and external combined, exceeding 75% or so of her GDP, is classified as being HIPC. By this, they have constantly been destructively critiquing the policies of His Excellency the President, Nana Addo Dankwa Akufo-Addo, and his NPP government.
According to them, he has borrowed much more money in his four and a half years in office than those of all his predecessors, dating from the late ex-President Dr Kwame Nkrumah, the first president of Ghana, through to former President John Dramani Mahama, put together.
Let me pause to define what Gross Domestic Product (GDP) is. “Gross Domestic Product” represents the total monetary value of all final goods and services produced (and sold on the market) within a country during a period of time (typically 1 year). GDP is the most commonly used measure of economic activity”
Despite the fact Covid-19 pandemic has exacerbated the economies of many a country, especially the developing countries and Ghana in particular, some Ghanaians playing cheap and populist politics still have the shameless audacity to accuse, the nation’s visionary president who put world class measures in place to mitigate the deadly effect of the Covid-19 pandemic on the population, of plunging the nation into a heavy debt, hence HIPC.
“Ghana’s total debt stock at the end of March 2021 is GHS 304.6 billion. The new debt figure brings Ghana’s debt to Gross Domestic Product (GDP) ratio to 70.2% as of the end of March 2021”.
Ghana’s debt stock hits GH¢336 billion; debt-to-GDP ratio now 76.4% according to Bank of Ghana (BoG).
From the below information carved from the London Metro newspaper (may I please have their permission) of Friday, 22 October 2021, England’s national, thus government, debt, has skyrocketed to £2.2 trillion. This is 95.5% of their GDP. This huge indebtedness has come about partly, if not greatly, as a result of the Covid-19 pandemic with its concomitant furlough.
What is furlough, one may ask? “A furlough is a temporary leave of employees due to special needs of a company or employer, which may be due to economic conditions of a specific employer or in society as a whole”.
“In 2020, in response to the COVID-19 pandemic, Her Majesty’s Government introduced what was described as a “furlough” programme to support employers and workers. For many years the term “furlough” had been very little known in the United Kingdom, and many HR managers were not acquainted with the US “furlough” system. Formally named the Coronavirus Job Retention Scheme, it funded businesses to continue paying up to 80% of employees’ salary for those that would otherwise have been made unemployed.”
In England, the government was paying 80% of employees’ salary while they were at home doing nothing with their employers complementing it with 20% to make the employer earn 100% salary as though they were working. This lasted for about 18 or more months; only to come to a closure on 30 September 2021. The furlough came under what was “The Coronavirus Job Retention Scheme” ended on 30 September 2021.
Did Ghana president not introduce certain measures to alleviate the suffering of Ghanaians during the lockdown? Were there not some free or reduced payment of electricity consumption by the public coupled with about a year free water consumption and free food for a few weeks to the needy in the society?
Those that tested Covid-19 positive were quarantined in hotels and other government-provided accommodations free of charge. People were employed to do contact tracing, thus, to find and test anyone who had, or has been in contact with anyone tested positive for Covid-19.
Just put a cost to it and you will appreciate the president’s noble and visionary efforts made to prevent Ghana from being ravaged by Covid-19, unlike how the disease did not only bring big economies like the USA, UK, France, Germany and Italy, to their knees, but killed hundreds of thousands of their citizens.
If the NPP government of President Nana Akufo-Addo has borrowed more money than any other government before him, it means he has been taking bold steps and policies that will extricate Ghana from the strangulating economic dependency on the white contemporaries.
As long as the money he has borrowed are put to good use to likely yield long term benefits to the nation and the people, and without his appointees, cronies and family members embezzling the money, then I am 100% supportive of him.
What about the free Senior High School education that will help make most, or all Ghanaians literates some years to come, to avoid the case of Ghanaians being taken for fools by politicians all of the time because of their lack of comprehension and ability to see through the tricks of the politicians?
Once more Ghanaians become politically savvy, they will begin to hold politicians accountable, thereby reducing official corruption, the bane of the nation’s economic emancipation.
England did borrow to help the people survive the pandemic. Has the government done wrong? The national debt has increased but it was for the good of the people? Isn’t it?
Do we condemn the British government of Prime Minister Boris Johnson because he has presided over the national debt reaching 95.5% of their GDP? No!!!
Finally, is England a HIPC nation that it cannot recover? I am asking Ghana MPs, opinion leaders, Civil Society Organization heads and academics to answer the question.
Ghanaians had better become politically savvy to avoid the occasions of political rivals of populism always capitalising on our ignorance and illiteracy to score cheap political gains.
If you borrow say US$100 million to construct “surfacing” roads (say, roads of 3 inches thick), better borrow US$150 million to construct asphalted roads (say, roads of 10 inches in thickness). The bigger the thickness of the road, the longer it lasts!
Visionary leaders always implement policies and programmes of value for money that last longer but the opposite is true for myopic leaders!
Drinking from the overflowing fountain of wisdom of Rockson Adofo, the proud son of Kumawu/Asiampa, the voice of the voiceless and the one who stands up to political and traditional bullies, regardless, will make you wiser to stand up to defend your rights and be able to read through the political fine prints.
President Nana Akufo-Addo is investing all the hugely borrowed money wisely – 1D1F, 1V1D, Free SHS, Plant for Food and Jobs, etc. In the long term, Ghana and Ghanaians will be the WINNERS!
Columnist: Rockson Adofo