Speaking on Metro TV’s Good Morning Ghana, as monitored by MyNewsGH, Dr. Mahama noted discrepancies in the government’s borrowing patterns and the rates at which it secures funds.
“At this rate, every single day, the government borrows over a billion cedis. Imagine how much they will have borrowed from the domestic market by the end of the year,” he stated.
He pointed out a mismatch between the rates at which the government borrows and key economic indicators such as inflation and the monetary policy rate.
“If your treasury bill rate is 19% and your inflation rate is 23%, which commercial bank will give you money when the value of your returns is far less than the price of goods and services?
“The average increase in the price of goods and services is 23%, while your monetary policy rate is 27%. The treasury bill rate should always fall between these two figures, yet they have set it lower,” he explained.
The MP suggested that there might be hidden factors influencing the government’s borrowing strategy, including liquidity concerns and financial maneuvers by the Bank of Ghana.
“Is it because some people had their money locked up and are now releasing it since the elections are over? Or is the Central Bank manipulating the rates? If it’s not manipulation, fine. But if it is, the Central Bank will have to explain,” he remarked.
Dr. Kabiru Mahama emphasized that borrowing is not inherently bad but must be managed responsibly, cautioning against unsustainable debt accumulation.
“Aside from borrowing to pay maturing debts, they are also adding to the debt stock. If your net borrowing is positive, it means you are increasing your debt burden. That is a fact,” he stated.
He urged the government to be transparent about its borrowing and economic decisions, ensuring that financial policies align with national development goals.
Source: mynewsgh.com
