Formar President John Dramani Mahama has said the economic hardship Ghanaians are facing now is down to the mismanagement of the economy and not solely coronavirus-induced, as government would want the citizenry to believe.
According to the former president, though the dreaded coronavirus pandemic has some level of impact on the economy, government’s appetite for consumption expenditure to win the 2020 election is the main driving force.
“COVID-19 has become the convenient whipping boy and has been cited as the reason for the economic crisis we face now and the attendant economic hardship. Yes, COVID-19 affected the economy, and no one can dispute that.
“It is, however, not the main reason why we are in the current hole we find ourselves. COVID-19 only became a pretext for reckless election related spending which produced the largest ever budget deficit in the recent economic history of Ghana last year.
“Our debt has ballooned to unsustainable levels – topping 80 per cent of GDP – exposing us to very high risk of debt default. Almost all our tax revenue is used to service our debt and the effect has been the introduction of several new taxes. This has led to rampant increment in the prices of goods and services. This is primarily responsible for the hardships Ghanaians are going through now.
“This government must accept that it is their mismanagement of the economy, their thirst for consumption expenditure and the desire to spend beyond our means in order to win elections that have plunged us into the current crisis and not necessarily Covid-19.”
The former president made this observation when he addressed the National Democratic Congress’ Professional Forum in Accra yesterday on the theme “The State of Ghana’s Economy: The Score Card.”
Mr Mahama said despite being faced with the ravages of the pandemic, Ghana’s neighbours and peers in Sub-Saharan Africa have protected their citizens similar to what Ghana did but avoided increasing their debts and deficits because they prudently managed their economies.
The President Nana Addo Dankwa Akufo-Addo led administration; the former president said had been the luckiest in the fourth republic having benefited 60 per cent of all the oil revenues accruing to the country since it started oil production in 2011, having received more than twice the total tax revenues available to his government.
“Within a space of 12 months, they have received up to GHC11 billion from the IMF alone, and over US$200 million from the World Bank, and other donors. They had access to over US$200 million from Stabilisation Fund we set up and got Central Bank financing of GH¢10 billion whereas we had zero financing from the Central Bank in 2016 despite all our challenges,” he stated.
In the view of the former president, the “unprecedented levels of corruption and the total lack of accountability and prudence” in the handling of the public purse must also be of concern to the Ghanaian as financial irregularities in the public sector has increased from GH¢700 million in 2016 to GHC12 billion in 2020 as reported by the Auditor General.
A former Finance Minister, Seth Tekper, said it was time the NDC countered the propaganda of the government and sets the records straight on the superiority of the former government in the management of the economy.
BY JULIUS YAO PETETSI
