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IMF borrowing cannot be compared to commercial borrowing, economist tells government

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Politicians, particularly those from the National Democratic Congress (NDC) and New Patriotic Party (NPP), have engaged in fierce debate over the acceptance of the $170 million loan agreement.

Several NDC members have expressed their disappointment with the $170 million that was granted.

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These NDC members assert that, notwithstanding the obligations owed, the NPP administration has no sympathy for Ghanaians. These NDC members believe that loan approvals will result in a significant burden being placed on tax payers.

In a panel discussion on Sunrise on May 3, National Democratic Congress (NDC) member and certified economist Bernard Oduro expressed his disappointment with the loan clearance.

Mr. Oduro emphasised that the IMF cannot be likened to commercial borrowing, in contrast to his fellow panellist from the New Patriotic Party (NPP), George Ayisi.

He asked legislators to abandon partisanship and show Ghana the respect it deserved.

“You must adore Ghana. If the NDC takes office and we make a mistake, I’ll tell it out loud. Let’s be honest; let’s not become so fervently political as to support anything that is even remotely immoral.

“From a financial economy perspective, taking on debt is not wrong. The NDC is not opposed to borrowing, taking out loans, or incurring debt since we believe in social justice and that any social reason requires revenue to promote equity. However, we are quite concerned about the framework of debts that you (NPP) enter into.

Are you targeting liability debts or asset debts? He probed.

And in every governance structure, before taking on debt, you must consider it carefully and determine whether it is an asset or a burden.

The greatest choice, according to Mr. Oduro, is for the government to pursue an asset debt rather than a liability debt.

Mr. Bernard Oduro gave several examples to illustrate his point, saying that asset debts involve borrowing money to build factories that can eventually make enough money to pay off debts, as opposed to liability debts, which involve borrowing money to buy fertiliser for farmers who do not provide work for the government.

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