Former Finance Minister, Seth Terkper, has blamed government’s inability to pay for its debt on the decision by the Finance Ministry to stop allocating monies into the Sinking Fund set aside to pay for Ghana’s Eurobonds.
According to him, the country was able to make payments for its 750 million dollar Eurobond signed by government in 2007 due to a decision to establish a Sinking Fund to pay for the loan after maturing.
Mr. Terkper explained that the government’s decision to abandon the Sinking Fund from 2017 exposed the country and compelled the government to always depend on the Stabilization Fund, forcing the Bank of Ghana to always step in to support the government’s expenditure unnecessarily.
“We have to behave like a middle income country and put this buffers in place. We saw what the Sinking Fund did for us. We were able to take $250 million to tackle Covid first, right before we even went to the bank for Covid loan and the World Bank for support”, he stated.
He argued that it was an unwise decision for government to abandon a laudable policy such as the establishment of a Sinking Fund which provided space for government to pay the country’s Eurobonds.
He stated that Ghana should not have been in the current situation it finds itself with the discovery of three new oil blocks inherited by the government.
“We started operations from the three oil blocks. We got about $3 billion from the IMF, and the World Bank. We also got Covid funds from the World Bank”.
Recounting how government misused all the funds at its disposal, Mr. Terkper pointed out that the government stubbornly refused to put a cap on the Stabilisation Fund, drawing monies from the funds with no accountability.
“After all the monies that came in we kept depleting the Stabilisation Fund. The government refused to put a cap on how much can be withdrawn. It makes you ask the question, how were all those resources used”, he added.
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