Joseph Schumpeter established the point so many decades ago that it is impossible to discuss and address issues relating to the economy without being confronted with politics. Schumpeter said, “Politicians are like bad horsemen who are so preoccupied with staying in the saddle that they can’t bother about where they’re going.”
After all, politics itself is economics because it generates and or uses scarce resources to improve the livelihood of the population inclusively and build institutions to sustain the creation of opportunities.
Public debt accumulation is not a matter only for today, but also for the future. The truth is in a multiparty democracy, where a party that forms a government today after a clean election, is bound to change at one of the future elections, which means political parties must be interested in public debt management.
In the era of bonds, where we believe elongated maturity is a good debt management strategy, politically it means another party will face the harsh repayment realities that may disable the implementation of forward-looking programs. It is therefore difficult when the opposition political parties don’t speak consistently about debt stocks, public debt transparency and accountability, and above all whether or not public debt management reflects asset creation for the country.
The reality is, no matter how acceptable the policies of a political party are, the implementation may be affected by the debt trap inherited. Recently, the IMF and the World bank seem to be concerned about public debt transparency, accountability, and reporting for some countries including Ghana.
These concerns should awaken political parties. The NDC in particular owes it as a duty to the public to make the subject “public debt” an important agenda because it has implications for her 2024 policies and implementation strategy when the NDC wins the elections.
The concern by the IMF and World bank threw the searchlight on the nature and trend of contingent liabilities.
There are those who feel talking about the public debt situation and the regime of arrears building up, will be accused of politics. The truth is the topic” public debt” can’t be discussed without the concept of politics. Debt is politics. If your debt management threatens upward price development, institutional weaknesses, alarming interest payment, the public will express their frustrations.
Approval or non-approval of borrowing must follow a political process to end up at Parliament. So if you don’t speak up about the debt situation and its associated matters of transparency, accountability, and reporting, that inability is a disservice to Ghana.
Sometimes, there are weird political and debt management strategies where a political party continues to borrow irrespective of the effects, believing that if they win again they will find a strategy to engage the public. If they don’t win, they say that is the business of the party that wins with the slogan if you inherited a bad debt management situation fix it.
A reflection on the statement, in the context of debt management, is relevant.
“Politicians are like bad horsemen who are so preoccupied with staying in the saddle that they can’t bother about where they’re going.” – Schumpeter
Opposition political parties that believe they can win the 2024 elections should take public debt management issues seriously.
