Finance Ministry Shoots Down ODI Report

Mona Helen Quartey
Mona Helen Quartey

The Ministry of Finance has reacted to recent study carried out by the Overseas Development Institute (ODI) on Sub-Saharan Africa International Sovereign Bonds, saying that the report is inaccurate. The ODI report assesses the risks associated with the use of international sovereign debt by sub-Saharan African countries.

Mona Helen Quartey
Mona Helen Quartey

However, in a press release issued by the Finance Ministry, and signed by Hon. Mona Helen K. Quartey, Deputy Minister, it described the contents of the report as factual inaccuracies.

The release noted that it is not true that strong dollar is threatening debt crisis in Sub-Saharan Africa.
The Finance Ministry however indicated that the claims that Ghana is frittering away money on public sector wage increases due to irresponsible use of funds are false and that the Government of Ghana has a strict policy of not using borrowed funds for recurrent expenditure. ?Therefore the claim that international sovereign borrowings were used to cover public sector wages is inaccurate,? it said.

The Deputy Minister averred that Ghana is capable of using its domestic revenues to meet its wage payments, indicating that Tax Revenue amounted to about GH?19.0 billion in 2014, whilst the wage bill was about GH?9.4 billion in the same year, in spite of recent difficulty in implementing the wage policy, Single Spine Pay Policy.
?Public sector wage adjustments initiated in 2010 were one-time rationalizations designed to correct inequities in the public sector wage structure,? she stated.

The Deputy Minister also stressed that Public sector wages are trending down; falling from 57.6% of government revenues in 2013 to 49.3% in 2014 and it is expected to decrease further to 40.5% in 2015.
?The 73.7% that is widely quoted is actually the ratio of compensation payments to tax revenues in 2013 including arrears. This ratio narrowed to 61.4% in 2014 and is expected to decrease further to 50% in 2015.?

??? Like all international bond issues, each Government of Ghana International Bond issue is approved by Parliament and is backed by a Prospectus in which full disclosure of the use of bond proceeds is made. It is the consistency and credibility of such declarations that have enabled Ghana to successfully complete three bond issues in international markets since 2007.?

She also pointed out that Ghana is fully capable of meeting its international debt service obligations and has done so consistently since 2007.




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