According to the Minister, “We have fallen into some bad habit of doing commercial projects and then asking the taxpayer to pay for it.”
Mr Terkper, who was speaking during a press briefing session in Accra yesterday, indicated that the government had made some corrections to its debt management strategies and had initiated a policy that would ensure that “if we borrow for commercial developments, the projects should pay for the loan.”
“It shouldn’t be the taxpayer and so today we have the developments at the airport on self-financing basis; we’ve put the expansion taking place at Takoradi on self-financing basis; the Tamale Airport is on self-financing basis,” the Finance Minister noted.
Responding to queries about the status of the Tema Oil Refinery (TOR) debt and whether the government had stopped paying the debt, the Minister was unable to readily provide the level of debt except to say that the debt was ring-fenced.
“What we need to do is to get the right policy in place to help our SOEs not to fall into debt and then we fall on the taxpayer,” he said.
He attributed the existence of the TOR and VRA debts to giveornaments inability to pay subsidies.
“The subsidies which we couldn’t pay, we are paying now after years of accumulation in the form of taxes and levies,” he admitted.
To take the burden of government, a major structuring of State Owned Enterprises (SOEs) is underway.
The only government entities that are allowed to make profits are the SOEs. They must come back to trimming their costs and making profits and to the extent that government is part of their dilemma in terms of subsidies and arrears, we must also make that correction so we can have a sound economy.