Haruna Iddrisu proposes a cap on government borrowing at 70% of GDP

The Member of Parliament (MP) for Tamale South, Haruna Iddrisu, says no government should be allowed to borrow beyond 70% of the country’s Gross Domestic Product(GDP).

This would be a significant move to restrict the government’s ability to take on new debt if implemented.

“This parliament must sit up and we must sit up to demand a feeling for good for all presidents and governments. I maintain that no president or government should be allowed to borrow beyond 70% of GDP,” he said during a debate on the budget allocation for the Finance Ministry on Thursday.

According to the World Bank, Ghana’s Public debt rose from 79.6% in 2021 to over 90% of GDP in 2022, as debt service-to-revenue reached 117.6%.

Ghana’s public debt went up by about ¢6.3 billion between April and June 2023 to reach ¢575.5 billion in June 2023, data from the Bank of Ghana has revealed.

This was equivalent to $52.3 billion, approximately 71.9% of Gross Domestic Product (GDP).

The former Minority Leader also called for a forensic audit into the indebtedness of the Finance Ministry to State Owned Enterprises (SOEs).

He specifically mentioned Ghana Gas, ECG, and NCA as entities where the Ministry of Finance may hold significant debt.

“I am asking for a forensic audit as to how much money the Ministry of Finance has held on state-owned agencies, Ghana Gas, ECG, NCA. Those of them who have other holding that the office of the Chief of Staff has taken money away from them. We need to know,” he said.