The Minority Leader in Parliament, Haruna Iddrisu, says his side will be working to ensure that there will be a borrowing ceiling for the government from 2022.
He said the agreements, as well as tax exemptions that would be presented to the House, must be accompanied with a value for money audit report to be favoured by the Minority side.
These austere measures, the National Democratic Member of Parliament (MP) for Tamale South Constituency, said were necessary to manage the debt situation of the country.
“Ending 2021, we will tolerate and accommodate government but into 2022, we will compel government with limitation and what and how much it can borrow and for what purpose,” he said.
He made the remarks on the floor of Parliament, Monday, in support of secondment of a motion by the ranking member on the Finance Committee of Parliament, Dr. Cassiel Ato Forson to approve a committee report on a credit facility agreement between Ghana and the International Development Association of the World Bank.
The agreement involves a USD75 million facility supplemented by a grant component of USD28.36 million on the Ghana Landscape Restoration and Small-scale mining project.
Dr Ato stated that the agreement which fell short for a minimum concessional loan, had a 30-year term made up of five years grace period and 25 years repayment with a service charge of 1.5 per cent, interest payment of 1.73 per cent and a grant element of 18.5 per cent.
Even though he gave his support to the terms of the loan, he raised concerns over what he described as a debt overhang situation of the country. “In the last six weeks, we are made to consider loans almost amounting to USD one billion.
“I believe that if you are in a ditch the first thing you should do is to stop digging, but, unfortunately, our brothers are still digging and if care is not taken, we will dig and dig and swarm in debt,” he added.
Debt overhang refers to a debt burden so large that an entity cannot take on additional debt to finance future projects.
The burden is so large that all earnings pay off existing debt rather than fund new investment projects, making the potential for defaulting higher.
Mr Kweku Kwarteng, Chairman of the Finance Committee of Parliament, moved the motion for the approval of the report.
Responding to the pronouncement of the Minority leader, Mr Alexander Afenyo-Markin, Majority Chief Whip, called on the Minority to help the government manage the debt situation by supporting the 1.75 per cent E- transaction levy because the government intended to raise revenue internally.
“If we stop borrowing, the alternative is to raise revenue from within and I think he has made a national call, a very patriotic call coming from the Minority leader,” he said.