Stop collateralizing statutory funds for debt servicing – Mahama tells Gov’t
Former President John Dramani Mahama has called for legislation to prohibit current and future governments from collateralizing statutory funds.
Speaking on the Ghanaian economy on the topic ‘Building the Ghana we want’ on Thursday, the former leader asked the government to stop collateralizing statutory funds for the purpose of taking on more loans.
He argued that “the wanton collateralization has been unhelpful” insisting it has limited the financial space of the statutory funds, including GETFund, and the District Assemblies Common Fund.
He observed that the biggest problem with Ghana’s economy today is the huge size of public debt, estimated to be around GH¢ 522 billion by close of this year.
Consequently, he said it’s critical for government to reduce the public debt, debt service obligations and create fiscal space to encourage economic growth.
He thus advised government to de-securitize the statutory funds and add them onto the public debt as part of the discussions on debt restructuring.
“We estimate that if the proceeds due ESLA, GETFund, Road Fund etc., are freed of the burden of collateralization and IPP payments are renegotiated, government would have access to a total of about GH¢ 16 billion in 2023, GH¢ 17.6 billion in 2024 and GH¢ 19.4 billion in 2025 from these funds alone.”
