A Member of the National Democratic Congress (NDC), Lawyer Edudzi Tamakloe, has made claims concerning Ghana’s interest payments and amortization.
The claims stem from discussions on The Big Issue, a political weekend program on Accra-based Citi TV. The program was aired on Saturday, February 11, 2023. The show, streamed live on Citi FM and its YouTube account, centred on discussions on the economy and the government’s debt exchange program. On YouTube, the show has garnered about 4,000 views.
Interest payments are the cost of borrowing money. The borrower makes these payments and pays back the principal on the loan. If you lend money with interest, the interest payment is the amount you are paid over and above the principal amount you lent. Amortization, on the other hand, is a method used by lenders, such as financial institutions, to present a loan repayment schedule based on a specific maturity date.
Claim 1: Consistently, since 2017, we have been doing 30 billion cedis as interest payments and amortization. (32:14-32:20)
Verdict: Misleading. According to data from the Ministry of Finance, even though in 2019 Ghana had been paying more than 30 billion as interest and amortization, it paid 18 billion each in 2017 and 2018.
Verification
In our verification, our research was focused on data from the Ministry of Finance since it is the only government agency that ensures the efficient and effective allocation and prudent management of government resources. DUBAWA looked at the interest payment and amortization data from 2016 to 2022.
In Appendix 2C of the Economic Classification of Central Gov’t Expenditure in the 2017 budget (page 179), ten billion and four billion cedis were quoted as the interest payments and amortization in 2016, totalling 14 billion cedis.
In the appendix of the 2018 Budget (page 8), 13 billion is quoted as the interest payments and 5 billion cedis as amortization in 2017, totalling 18 billion cedis.
14 billion and 4 billion cedis totalling 18 billion cedis, were also paid as interest and amortization, respectively, in 2018, as captured in the 2019 budget (page 202).
| Interest Payments and Amortization (2016-2022) | |||
| Year | Interest Payments (cedis) | Amortization(cedis) | Total(cedis) |
| 2016 | 10 billion | 4 billion | 14 billion |
| 2017 | 13 billion | 5 billion | 18 billion |
| 2018 | 14 billion | 4 billion | 18 billion |
| 2019 | 19 billion | 11 billion | 30 billion |
| 2020 | 24 billion | 14 billion | 38 billion |
| 2021 | 32 billion | 13 billion | 45 billion |
| 2022 | 44 billion | 11 billion | 55 billion |
Similarly, in Appendix 2A of the Economic Classification of Central Govt Expenditure of the 2021 budget (pages 204 and 205), the amount quoted to be the interest payments and amortization for 2019 and 2020 are spelt out. For 2019, the government paid 19 billion as interest payment and 11 billion as amortization, totalling 30 billion cedis. In 2020, 24 billion and 14 billion cedis were paid as interest and amortization, totalling 38 billion cedis.
For 2021, the government totalled 45 billion cedis on interest payments and amortization. This was captured in the 2022 budget statement and economic policy (page 230).
In 2022, the outturn of the amount paid as interest and amortization was not officially stated in the 2023 budget. Still, the projected payment for 2022 in the 2023 budget (page 187) revealed that 44 billion and 11 billion are expected to be paid as interest and amortization, totalling 55 billion. It is untrue that Ghana has been paying 30 billion cedis in interest and amortization since 2017.
Claim 2: By 2021, we were doing about 45 billion cedis in interest payments and amortization (32:21-32:28).
Verdict: True. Data from the Ministry of Finance quotes 32 billion and 13 billion cedis as interest payments and amortization in 2021. This sums up to 45 billion cedis.
Verification
In Appendix 2C of the 2022 budget and economic policy released by the Ministry of Finance on (page 230), 45 billion is captured as the amount it paid as interest payments and amortization. According to the budget, 32 billion was spent as interest, while 13 billion was paid as amortization. The sum of this is 45 billion.
It is true that Ghana paid 45 billion cedis in interest payments and amortization in 2021.
Claim 3: I recall when we (NDC) were in power, the maximum interest payments and amortization we ever did was 11 billion cedis in 2016 which was the highest (32:28-32:44).
Verdict: False. The Ministry of Finance quotes 14 billion cedis as the amount paid in interest and amortization in 2016. Ten billion cedis and four billion cedis were paid, respectively.
Verification
Per the table above in Figure 1, interest payment was ten billion cedis, while amortization was 4 billion cedis in 2016. The sum of this is 14 billion cedis. The total is 3 billion cedis, more than the 11 billion cedis claimed by Lawyer Edudzi Tamakloe. This is captured in Appendix 2C of the Economic Classification of Central Gov’t Expenditure in the 2017 budget (page 183).
It is, however, not true that in 2016, 11 billion cedis was the highest the National Democratic Congress (NDC) paid in interest rates and amortization. In 2016, it paid 14 billion.
Claim 4: From 2017 till date, we have not done (interest payment and amortization) less than 33 billion (32:47-32:53).
Verdict: False. Per the Ministry of Finance data, in 2017, 2018, and 2019 the government paid 18 billion, 18 billion, and 30 billion cedis in interest and amortization, respectively.
Verification
Per the data from the 2018 budget (page 5), 2019 budget (page 202) and the 2022 budget (pages 204 and 205), it is stipulated that the government spent 18 billion, 18 billion, and 30 billion in interest rates and amortization for 2017, 2018, and 2019 respectively. These figures are less than 33 billion cedis. However, it is evident that from 2020 to 2022, the government paid more than 33 billion cedis in interest and amortization. In 2020, it paid
Conclusion
From the investigations, DUBAWA can conclude some of the figures provided by Edudzi Tamakloe representing interest and amortization payments were inaccurate.
