Vice Prez. says drop in gold, cocoa prices reasons for gov’t borrowing

The Vice-President Amissah Arthur has said that the drop in the world prices of the country’s two main export commodities was the reason for government’s extensive borrowing.

Several groups, including the minority in Parliament and Pressure group Occupy Ghana have criticized government’s borrowing in recent times, describing it as excessive.

NPP’s vice presidential candidate in the 2012 elections, Dr. Mahamadu Bawumia has previously stated that Government’s continuous borrowing was needless and could affect Ghana’s rating and threaten.

However, according to the Vice President, the fall in the prices of Gold and cocoa caused a significant reduction in the government’s revenue, forcing them to turn to external financiers in order to complete certain vital development projects.

“Currently we are going through some short term difficulty because the [prices] of the primary commodities that we produce and export went down significantly and therefore created difficulties for us,” Amissah Arthur said.

“We have significant need for investment in infrastructure but with the decline in our earnings, we could not postpone the development of that infrastructure and so it went ahead with some external borrowing to make sure we could finish those projects and that led to fiscal deficit which we are dealing with now,” he added.

Amissah Arthur made these comments when a business delegation from the Flanders Investments and Trade group of Belgium paid him a visit at the Flagstaff House in Accra.

He stated that despite the current problems with the fiscal deficit, Ghana’s medium-term economic prospects remain bright due to gains being made in the oil sector and in power generation.

“We found some petroleum resources off shore Ghana which we started producing 3 years ago and have since seen significant yield. In gas, we have a prospect for helping to reduce the cost of power generation. And also hopefully some other products in fertilizer and so which are prospects we are looking at,” he opined.

Foreign investment needed for Better Ghana Agenda

Vice President Amissah Arthur argued that in order to ensure that the better Ghana agenda was realized, there needed to be more foreign investment in the country.

“But that would require significant new investment that we do not have and that is why we are inviting foreign investors to look at these prospects in joint partnership with us to be able to exploit these resources in order to give our people much better standard of living than they have now.”

By: Edwin Kwakofi