The National Democratic Congress it has reiterated that NDC has a great track record of using foreign loans to invest in solid projects which have started bringing high returns to the country.
He said some of the investments made with the foreign loans were the gas processing infrastructure, the Kwame Nkrumah Circle Interchange, the Kpone Water Expansion project, the Tamale Airport Expansion Project, the University of Ghana 610-bed hospital and the Tema Port expansion project.
He further stated that taking foreign loans to refinance more expensive domestic loans as the Mahama led-government had done was not only commonsense but globally acceptable.
As a result of these smart borrowing and investments, the NDC government, led by President John Mahama, was taking “Ghana to the next level which reduced the national debt without jeopardising development,” Mr Kwetey said.
He said through President Mahama’s competent leadership a number of public entities were becoming viable once more to generate more jobs for Ghanaians.
Some of the viable companies Mr Kwetey listed included Ghana Ports and Harbours Authority, Ghana Airport Company, Ghana Gas Processing Company and Metro Mass Transport.
He said the NPP government only invested its 750 million dollar loans on procuring prepaid meters and the purchase of locomotives without constructing one centimetre railway line while the rest was utilised to pay salaries which demonstrated the priorities of the NPP.
Mr Kwetey said what President Mahama has done was to position the country for a bright future by fueling national development with the foreign loans.
Setting the Record Straight series is organised every election year by the NDC through press conferences to address some pertinent issues ahead of the polls.
Ghana’s total public debt as of July this year was estimated at GH¢110 billion, according to the latest summary on economic and financial data released by the Bank of Ghana.
Dr Mahamudu Bawumia, the NPP presidential running mate, delivering a public lecture on the State of the Ghanaian Economy, recently held that about 66 per cent of Ghana’s total debt since independence had been accumulated under President Mahama which had not reflected in economic growth.
Dr Bawumia also noted that Ghana’s debt total had shot up from GHc9.5 billion when the NDC took over to its current level.
Lack of foresight
Giving the background, Mr Kwetey recounted that Ghana’s founder, Dr Kwame Nkrumah, described the forbears of the NPP as visionless for failing to realise that the loans that were being contracted in the early 60s for the construction of projects such as the Akosombo Dam were investments rather than debts.
The Transport Minister further stated that “nearly six decades after Kwame Nkrumah made that statement, the fact that the NPP tradition is still holding the same position unfortunately reveals their pitiful lack of foresight”.
Mr Kwetey reiterated that “we in the NDC have a great track record of using foreign debt to invest in solid investments,” while juxtaposing the NDC’s handling of foreign loans with the NPP’s borrowed $750 million from the international financial market in 2007.
The team of government officials forming the Setting the Record Straight’ forum maintained that the press conference was not in response to Dr Bawumia or the NPP.
The Deputy Minister in charge of Tertiary Education, Mr Samuel Okudzeto Ablakwa, said it was a routine programme the party organised in an election year as part of its political programmes.
Mr Kwetey noted that if the economy was stable under the NPP, it was because President Kufuor applied for special assistance from the IMF and the World Bank.
Ghana received about $3.7 bn in debt relief between 2001 and 2004.
According to Mr Kwetey, this decision shielded the NPP government from experiencing currency instability because dollars were injected into the economy leading to currency stability.
“The government also got some breathing space as it was no longer required to meet some debt servicing obligations.
“NPP boast a lot about having recorded a long period of currency stability. The truth, however, was that the period of that stability was mainly during the period when the NPP was not servicing external debts because of the debt-forgiveness dispensation under HIPC,” Mr Kwetey explained.
“Virtually all developing countries that had the same dispensation enjoyed currency stability as well. So it was nothing exceptional on the part of the NPP in terms of currency stability. It was no special competence.”
“But after the HIPC programme was completed by the end of President Kufuor’s first term in office in 2004, Ghanaians got a rude awakening to the NPP’s ‘incompetence.’”
“As soon as NPP exited HIPC and faced its first main obstacle, the real incompetence was massively exposed…they lost control over the cedi.”
“Out of their desperation, they had to sell Ghana Telecom in order to stem the crisis. It must be remembered that in the eight years of the NDC administration, we have never had to resort to the sale of any national asset simply to stay afloat.”
Ghana had a “shocking” foreign reserve of $1.8 billion by the time President Kufuor left office, the minister went on. The NDC has a foreign reserve of $5.4 bn under the “competent leadership of the Mahama administration”, he said.
Mr Kwetey noted that the economy hit a budget deficit of 15 per cent in 2008, the highest since 1993.
Source: radioxyzonline.com/ with additional files from graphic