Govt courting IMF sympathy to borrow more - Isaac Adongo
The Member of Parliament (MP) for Bolga Central, Mr Isaac Adongo, has accused the government of trying to court sympathy from the International Monetary Fund (IMF), using the GH¢7 billion expenditure loophole’ as a bait.
Advertisement
After realising that the three-year extended credit facility (ECF) with the IMF limits the amount the government can borrow at a time, Mr Adongo said the government was now looking for excuses to bypass that limit, one of which was the allegation that the previous administration hid GH¢7 billion from the fund.
“How can we hide expenditure to the tune of GH¢7 billion,” he asked in an interview with the GRAPHIC BUSINESS in Accra.
“These are people who are going to face the IMF and because of that they go out and make it seem like they have inherited lots of arrears and debts so that they will be given the opportunity to borrow more and expand the deficit,” he said.
He explained that the government, after it realised that there was no fiscal space for it to raise funds to be able to deliver on its numerous promises, was now intentionally creating that impression to be able to court sympathy from the public.
Outstanding arrears
Responding to the reasons behind the GH¢7 billion expenditure, Mr Adongo said, the amount was arrears and commitments that were necessary in the governance of any financial regime.
“Development projects that are executed will span a number of years. For instance, if you are constructing the Eastern Corridor road, you will have to commit the state to an expenditure that will span a certain number of years and so at the time that you will be leaving office, you would have executed the project to a certain stage; you would have made payments on the project to some stage; and you will have some certificates or some bills that have been raised that you have been unable to pay.”
“So the government needs to know that yes, there is an obligation of certain payments that you need to make but beyond that, the project still has a certain amount of expenditure that will accrue as to when the project is being executed and it may span a year or two and that must be catered for in the budget,” he added.
He noted that the GH¢7 billion arrears was because the previous government, having assessed the need to eliminate infrastructure deficit, engaged in certain projects for which reason certain arrears had accrued.
Funding secured
The legislator further explained that most of the funds that constituted the GH¢7 billion arrears had already been secured, adding that it was not now that the government was going to look for funds.
“With the Eastern Corridor project for instance, we already have a loan from the Brazilian government. The same applies to the Bolga Regional Hospital, the Wa Regional Hospital and the Kasoa Interchange. The funding for all these projects have already been secured,” he noted.
On the arrears that arose from statutory funds, Mr Adongo said, “it is because by our treasury system, you have to collect the revenues into the consolidated fund then within that quarter, you access the total monies available and based on the formula, you distribute and share.
“So, they are always in arrears by, at least, one quarter or two, but the monies should be sitting in the consolidated fund by now,” he added.
He said it was only the government of Ghana components that the government needed to look for money to cater for.
Ghana’s bond yield drops
While insisting that the claim was erroneous and should, therefore, be ignored, Mr Adongo said the government needed to know that such allegations were disingenuous to the economy, citing the impact of the claim on the country’s bonds.
He added that such statements had the tendency to jeopardise the country’s credit ratings since they sent a message out there that the country’s financial statistics could not be trusted.
“We are no more in an electioneering season. If you have facts, meet your donors and IMF and put those figures to them, they will know how to interrogate them. It is not good to make public such information to court sympathy and in the end, jeopardise the whole nation,” the MP said.
