The Head of Finance Department of University of Cape Coast, Prof. John Gatsi is asking government how can they claim to have used the past two and half years to finish paying debts of the previous NDC administration when in actual fact the average maturity date is 7 years.
Speaking on GBC Radio on Friday, June 7, 2019 and monitored by Awake News, Prof. Gatsi said that it is wrong for a government to say the past two and half years have been used to pay the debt of the previous government.
He explained that the “debts of the previous [NDC] government are such that if you take it that the average maturity date is 7 years how do you finish paying in 2.5years?”
He noted that “every new government takes on existing debt obligations just as NDC took over the first Eurobond of $750million over a ten year period and paid all the coupon payments as well as the establishment of a sinking fund that retired the debt in April 2017”
According to him, “no government pays only the interest obligation of previous debts. Take an annual coupon bond for 30 years mean at the end of each year the coupon payment which is the interest payment will be made”
“That it means with multiple bonds from 2017, the government has been paying interest on the bonds in addition to interest on previous bonds” – he explains further
Prof. Gasti is on the view that it is high time “politicians must know that anytime a new government comes into force, payment of debt, receipts of revenue through past investments and taxes are inherited. Therefore, when a government talked about payment of debt and arrears without talking about revenues received through past investments and tax revenues then the government may be tired to govern”
“For example apart from the cumulative energy debts there was clear revenues to pay the energy sector debts through the energy sector levies”
“It is also true that NDC will inherit debt obligations, revenue streams from NPP and projects to commission just as NPP has commissioned projects financed by debts under NDC” – He added
By: Efo Korsi Senyo | awakenewsonline.com