Rate Of Borrowing Has Been Reduced Drastically – Bawumia

Vice President Dr Mahamudu Bawumia says President Akufo-Addo has kept his promise of reducing the country’s rate of borrowing as compared to the previous NDC administration.

Speaking at a town hall meeting at Kumasi in the Ashanti Region to account for the various campaign promises made to the people of Ghana, Dr Bawumia said better economic management and fiscal discipline has put the economy of Ghana on the right path.

Addressing issues of the country’s total debt stock which has hit 214.9 billion as at November 2019, Dr Bawumia explained that during their three years in office the country’s debt stock increased by 79 percent as compared to the 247 percent from 2012 to 2016.

With his calculation, the debt stock which also included the banking sector cleanup would have been at 203 billion cedis without the banking sector cleanup cost. He strongly attributed the success to a positive primary balance and fiscal discipline in the economy.

“Let us look at what has happened to the debt as a result of this fiscal discipline that we have imposed on yourselves in achieving the positive primary balance. The total public debt has increased from 122 billion Cedis in 2016 to 214.9 billion in 2019 that is 9.3 percent of GDP at the end of November 2019, but this includes the cost of the banking sector cleanup which you know is over 13 billion Cedis and counting, excluding the cost of the banking sector cleanup the debt stock stands at 203 billion cedis however if you look at these debt dynamics the strong physical adjustment that has taken place and better debt management has meant that the rate of debt accumulation has slowed down considerably to the lowest in a decade.

”Between 2008 and 2012 Ghana debt stock increase by 267%, between 2012 and 2016 Ghana debt stock increase by another 247% but between 2017 and 2019 the increase has been by 79 percent so there is a big difference.” he said.

Dr Bawumia, therefore, believed that the NPP government led by President Akufo-Addo has kept their promise to the Ghanaian people to reduce the rate of borrowing.

“So you are seeing that there is a fiscal discipline the is being implemented there is a big difference between before 2017 and after 2017, so the government of Akufo-Addo has therefore kept its promise to reduce the rate of borrowing that was taking place before we came into power..” he added.

15 Taxes Abolished

Dr. Bawumia further revealed that the NPP government has fulfilled its promise by abolishing 15 separate taxes in its first three years in office.

According to him, despite challenges of revenue the government faced when it assumed office, government decided to abolish 15 taxes the NDC had imposed on Ghanaians, in order to provide reliefs to the people and businesses, and also to shift from over reliance on taxation to industrial growth.

“Notwithstanding the revenue challenges we inherited, we took the decision to reduce taxes in the economy. We understood that the tax burden on individuals and businesses was high following the high tax increases under the NDC regime,” Dr. Bawumia said.

” We were aware that this could worsen our revenue challenges in the short term but we were of the firm conviction that this would spur growth and increase tax revenues in the medium to long term.”

“In fulfillment of our promise to move the economy from a focus on taxation to a focus on growth we have thus far reduced or abolished at least 15 separate taxes and levies.”

” It was a brave decision. No such broad based reduction in taxes had been implemented by any government since independence.”

Digital agenda

Touting the government’s agenda to digitize the economy, he said the introduction of digital drivers’ license and vehicle registration, the online application of passports, the paperless port system, and online renewal of NHIS membership have all curbed the frustrations and the petty bribery and corruption that many Ghanaians face in their daily lives.

“The National Insurance Commission has just digitized the motor insurance database. This means that the era of fake insurance certificates is over and the Police can check the insurance status of any vehicle through their mobile phone.”

“Thanks to the Bank of Ghana and GhIPSS, Ghana will launch a Universal QR Code payments system next month. This will make it possible for all retailers to receive payments on their mobile phones without the need for Point of Sale device,” Dr. Bawumia said.