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Finally, the public debt figure is out. They are Ghc291.6 billion, 139% more than the 2016 public debt figure of Ghc122 billion or Ghc169.6 billion in absolute terms, excluding debt from the first quarter for 2021.
The 2021 budget revealed that the debt-to-GDP ratio in 2016 based on readjusted GDP was around 58% and not 73%. Which means that we are witnessing the worst debt-to-GDP ratio in fiscal years 2019 and 2020 between 2012 and 2020.
The concept of percentage growth in debt was introduced into the 2021 budget. It is common knowledge that a higher percentage in a small number produces less effects than a small percentage in a large number. If the debt in 2012 was 50,000 million Ghc and at the end of 2016 it reached 122,000 million Ghc, it means that the debt growth was 144%, which means that 72,000 million Ghc were added. The same calculation shows 139.6% from 2017 to 2020 with a debt of 169.6 trillion Ghc added. Interest payments are not based on debt growth, but on the aggregate absolute amount. Therefore, the one that added the most debt in absolute terms is the one that created the most debt management burden for the economy. Introducing percentage growth of debt under NDC and NPP is not helpful to the government, as the explanation is not convincing.
The regime with the highest absolute debt is the one that sacrificed more of the country’s current or future tax revenues because public indebtedness is simply committing future tax revenues to repay what is borrowed today. Hence the need to align the present value of future tax revenues with the amount of loans today.
Financial sector cleaning tax !!!
In the past, successive governments introduced a national reconstruction levy on bank profits to help revamp the economy and fix fiscal difficulties. That seemed to be a call on the banks to sacrifice shareholder money for nation-building. Ghc21billion that was insured and spent on the exercise. Why this after exercise? This is an intimidation fee imposed on banks that will translate into the cost of bank transactions.
Citizens are going to pay off huge public debt with uncontrolled spending in an election year by introducing levies and raising taxes. It is evident that uncontrollable indebtedness puts pressure on the country’s finances in such a way that after payment of interest and compensation there is nothing left to throw the “ball” so they receive us with the tax of the “ball”. In the election year, the government has money for Covid-19 related matters, but after the elections, citizens must pay Covid-19 taxes to Covid-19.
Everything that citizens cannot do without has been taxed and collected. These are trapped taxes, since the elasticity of demand means that citizens cannot do anything else.
Welcome thug taxes welcome trapped taxes and welcome balls tax.
The 2021 budget is like what you expect in an era of austerity. The strategy is instead of being frank with citizens to tighten their belts, tell them this is the year of the highways, which is why we are increasing road tolls, tell them we want to take care of their ball and health tax. as well as the health tax.
The only reason debt breaks down to show Covid components and overcapacity is to introduce taxes or levies.
