Let us find a way to stop borrowing
Folks, did you all read this memo below from our new Finance Minister, Hon. Ken Ofori Atta dated 3rd April 2017.
And this is supposed to be good news, right?
We are all well educated, even if not Finance Majors. It took me 19 years after studying Engineering and Management in industry to really understand how money works! What does a bond of $2.25 billion yield of 19.75% mean to a borrower?
For a 15 year fully amortised loan, payable monthly and with a zero balance after 180 months, one must be able to pay the debt in a Principal (P) and Interest (I) payment of $39,101,732 per month or $469,220,784 per year for the 180 months.
Fully amortised means the loan will be fully paid off in that time with zero balance.
Interest only payments comes to $37,031,250 per month or $443.375 million yearly. (By the way, a Business Calculator is not expensive and I strongly recommend it for every adult).
This means instead of paying the interest only and in 10-15 years looking for another loan, one can pay an additional $2,970,482 per month and be rid of the loan. For a nation of 23-25 million, this extra $2.97 million is not as bad as it may seem. A prudent cost cutting and good taxation system is what is needed.
One of the greatest Biblical words of wisdom I remember says “A borrower is servant onto the lender”.
Borrowing is servitude! Slavery was abolished in the 1835-1869 time and today we are voluntarily enslaving ourselves to others, mortgaging our lands and mineral deposits- gold, ores, diamonds and oil deposits. This is wrong for Ghanaians yet unborn! We must stop it!
It is the duty of all of us alive, especially those intelligent well educated people given the responsibility, like Hon. Ken Ofori Atta, Seth Terkper, Dr. Daaku and Dr. Kwesi Botchwey before him, to FIND A WAY TO STOP BORROWING! Western models may work for industrialised nations like the US and UK, but we must remember the specific economic and cultural background of each nation.
It is imperative that traditional wisdom be applied to our modern day living. We are all Western educated and there are ways of balancing revenue to expenses! Our ancestors did not live indebted to foreigners.
Granted there is international trade, there are ways of balancing revenues to expenses than living as servants or enslaved by debt to others, and unable to even enforce our own laws and rather ruin our waters and environment for future Ghanaians, dying at average 20 years earlier (57 years compared to 77 life expectancy for British or Americans). I strongly advise all of us educated adults and advocates to advise, persuade and push our elected officials against this foreign borrowing lifestyle and let us build our nation on productive efforts. There are strategies we can learn from nations like Singapore, Korea, India and China.
India today has clean hospitals that cater to Americans using their American trained doctors and charging a fraction of what it costs in America for same medical operations. The customer saves money and India gains in millions of dollars by simply employing the same doctors they trained overseas and in clean acceptable 4-Star hotel type environments free of the typical ugly open gutters and filth.
We can live as intelligent and prudent planners and adults with reserves for our children and those behind instead of this escalating debt burden and Western economic model of debt living that may fit the industrialised nation but not us. The least we the educated can do is ensure a payment schedule and plan for every loan and not re-borrowing every few years to retire old debts.
We must expect extreme reduction in the cost of government in numbers and expenses, especially executive compensation and benefits. It is time we do this for our future and stop the economic enslavement from this NADAA era.
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