John Mahama, Dr. Bawumia
The 2020 Presidential Candidate of the opposition political party, National Democratic Congress (NDC), John Dramani Mahama has descended on the Akufo-Addo led administration over claim that he should be partially blamed for the country’s current economic woes.
According to him, the government should stop shifting blame as the current economic woes due its unwise decisions.
He said the current leadership has refused to exhibit contrition and sobriety amid the gloomy economic outlook.
Responding to Vice President Dr. Bawumia’s accusation that the NDC is to be blamed for Ghana’s worsening debt situation and the subsequent International Monetary Fund (IMF) support request, the former President said though economic hardships persist, all government does is go about putting up “ridiculous and comical” public displays.
The former President was of the view that no amount of buck-passing can wipe away the irrefutable fact that the country’s present economic situation stems from reckless election-related expenditure, mismanagement, ineptitude, and lack of proper leadership.
He said “The highest form of irresponsibility is to shift responsibility to others, and irresponsible leaders are simply not worth the mandate of the people. I have recently dispelled, based on facts and figures, the false attributions made for our economic problems, but it bears repeating that none of the tall lists of excuses he made for where we are is acceptable.”
“All our neighbours were also affected by COVID-19 and exist in the same world in which the Russian-Ukrainian conflict is raging. Almost none of them have anywhere near 30% inflation, double-digit deficits, the kind of debt we have, or a debt to GDP ratio of around 90%. None of them has a higher risk of debt default than we do.”
He stressed that “the often-cited GHS 25 billion used in the financial sector clean-up are self-inflicted and the result of reckless, politically motivated decision-making.”
He said the problems the banks and financial institutions had could have been resolved with a third of that amount and would have been recoverable in good time.
Touching on Dr. Bawumia’s claims about the excess capacity payment driving Ghana’s debt situation, the former President indicated that “the monies paid to the IPPs, which is deceptively couched as payment for “excess capacity” are in fact subsidies paid for power that has been generated and supplied to consumers.”
“We had done sufficient work before our exit in 2016, to address the financial bottlenecks in the energy sector. One of the outcomes of this work is ESLA, which to date has given this government about GHS 23 billion. This should be enough to substantially ease the financial problems of the sector. The now legendary mismanagement of this government has however ensured, that despite collecting all this money, IPPs are currently owed over $800 million equivalent to about GHS 6 billion.”
The former President said that the country is in its current state because of some “unwise” decisions government has made.
He said the decision to run to the IMF, for instance, was taken at a time when the economy had already suffered substantial damage.
“After a lengthy period of living in denial and plunging the economy into unprecedented doldrums, government finally decided a few weeks ago to request an IMF programme. Inflation stands at a 19-year high of almost 30% for June and is almost set to rise. Our deficit and revenue targets have so far been badly missed, and we are most likely to post yet another double-digit deficit at the end of this financial year. Our public debt has continued to mount.
“Latest information indicates that government has up to GHS 40 billion in arrears and contingent liabilities, in addition to the official public debt of about GHS 400 billion. On the back of this, it is believed that our debt to GDP ratio runs into the 90% region. Our ability to meet our debt service obligations remains tenuous, with Ghana ranked as the country with the second-highest likelihood of debt default in the world after El Salvador. It is no secret that our foreign currency reserve position is extremely precarious. This leaves us vulnerable unless there is an urgent injection of additional foreign exchange inflows,” he added.
Mr. Mahama therefore asked President Akufo-Addo to take control of the situation and inject fresh, reflective, and dynamic thinking into the management of the economy.
By Vincent Kubi