The Vice-president, Dr Mahamudu Bawumia, says although the economic growth of the country has been temporarily stalled by the COVID-19 pandemic and the Russia/ Ukraine war, the nation is still on the right path to economic prosperity.
Acknowledging the reality of the suffering people are facing, he said the future of Ghana was brighter and safer under his government and with sound policies to enhance growth, and fiscal and monetary discipline, the government would honour its promise of alleviating hardships.
“We may not yet be where we want to be, and we may be buffeted by the winds of the pandemic and the war for yet a little while, but we have made a great start and, together, we shall finish what we started,” he said at Kasoa in the Central Region yesterday.
DrBawumia was delivering an address on the state of the economy at the 2022 conference of the National Tertiary Students Confederacy (TESCON), the youth wing of the New Patriotic Party (NPP)organised in collaboration with the Danquah Institute.
It was attended by some big wigs in the party, including the chairman of the party, Freddie Blay and other executives; First and Second Ladies, Mrs Rebecca Akufo-Addo and Mrs Samira Bawumia; ministers of state and regional party executives.
Prior to the pandemic, Dr Bawumia said the government had stabilised the economy but currently economies throughout the world are experiencing severe challenges following the COVID-19 pandemic and the more recent Russia-Ukraine war, a situation defined by rising fuel prices and commodities.
Despite these challenges, he said, the growth of the economy was fundamentally stronger than the government inherited and this was evident by the decline of inflation from an average of 17.5 per cent in 2016 to an average of 7.2 per cent in 2020 and an average increase of 10 per cent in 2021.
“As of February 2022 inflation, rose further to 15.7 per cent as a result of global conditions, including a rise in crude oil and other commodity prices and the Russia/Ukraine conflict.
“It is important to note that between 2013 and 2016 inflation averaged 15.9 per cent. Between 2017 and 2021, however, inflation has averaged 10.4 per cent notwithstanding the impact of COVID-19,” he said.
DrBawumia said notwithstanding COVID-19, interest rates were lower now than they were in the 2013 -2016 period as the Bank of Ghana’s Monetary Policy Rate (MPR) was cut by a cumulative 11 per cent between January 2017 and January 2021, translating into a reduction in interest rates and lending rates.
DrBawumia said the fiscal deficit between 2013 and 2016 averaged seven per cent of GDP while between 2017 and 2019 (before COVID-19), it declined to an average of 4.5 per cent.
He said Ghana’s total debt stock has shot up from GH¢122.2 billion in 2016 to GH¢ 351.8 billion in 2022, an increase of GH¢ 229.6 billion and explained that the expenditure on COVID-19, Banking Sector Clean up and the Energy Sector Excess Capacity payments cumulatively amounted to GH¢ 50.1 billion (the equivalent of some $7 billion), financed from borrowing.
The banking sector and COVID-19 expenditure, he said were necessary because while the banking aspect helped save the sector from a more devastating impact, the COVID helped to save lives.
Touching on digitalisation, he said the various interventions had helped to increase revenue, tackle corruption in the implementing agencies, and made service delivery easier which have all helped to improve the economy.
BY JONATHAN DONKOR