No government should be permitted to borrow more than 70% of GDP – Haruna Iddrisu

The Member of Parliament (MP) for Tamale South, Haruna Iddrisu, has made a bold proposal to cap government borrowing at 70% of GDP.

This move, if implemented, would significantly restrict the government’s ability to take on new debt.

“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.

In addition to proposing a borrowing cap, 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.

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%.

This level of debt raises concerns about Ghana’s ability to repay its obligations and leaves the country vulnerable to economic shocks.