News Story

NPP

May 09, 2016


Don’t Go For Another Eurobond ; When You Are In A Hole, Stop Digging – Bawumia Cautions

Dr. Bawumia while speaking on the precarious debt situation Ghana finds itself in at the Accra Polytechnic, cautioned the government against going for another Eurobond this year, as it would only deepen the troubles the economy already finds itself in.

“With the debt to GDP ratio at 73%, i.e. beyond the threshold of debt sustainability, what is amazing is that the government wants to issue another sovereign bond of some $1billion this year to add more to the country’s debt burden. My humble advise to the government is that “please don’t ”. The last Eurobond was issued at some 10.75% even with a World Bank guarantee! You will only get the economy into more trouble and create more unemployment. When you find yourself in a hole please stop digging!”, he said.
Dr. Bawumia pointed out how the unbridled borrowing by the NDC continues to harm business and job growth in the economy.

“With such large scale borrowing, government is crowding out the private sector which is unable to borrow to grow their business. Risk free Treasury bill rates are around 25% (up from 10.6% in 2011) and bank lending rates are on the rise because of excessive government borrowing. Lending rates are now 35 percent.”