The opposition National Democratic Congress (NDC) yesterday described as inaccurate the economic records listed by the the government’s economic management team and said the economy has rather been drawn back in the last two years.
The much publicised civil society event was turned into a political jamboree by the NDC, where party stalwarts eulogised their performance in government, in direct response to an economic lecture by the Vice-President, Dr Mahamudu Bawumia, in Accra last Wednesday.
The lecture, which was under the auspices of The Coalition For Restoration (CFR), a pressure group affiliated to the National Democratic Congress (NDC), was on the theme “Ghana’s rising fiscal risks, financial crunch and external vulnerabilities: A postmortem of the Extended Credit Facility (ECF) Programme and a preview of the economy without the International Monetary Fund (IMF)”.
The Member of Parliament (MP) for Bolgatanga Central, Mr Isaac Adongo, set the ball rolling when he said the Bank of Ghana (BoG) pumped almost a $1 billion into the economy to stabilise the depreciating cedi in the first two months of the year, disputing claims by Dr Bawumia that there was no dollar injection to shore up the local currency.
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Quoting from a Bloomberg Terminal, Mr Adongo said although the action was to shore up the cedi and give the government a positive outlook, “the cedi immediately faced a major attack and ended trading at GH¢5.6 to one US dollar”.
Mr Adongo, who appeared energised by the presence of former President Mahama and some party bigwigs at the lecture that was held in Accra and attended by business associations, civil society organisations and party sympathisers, occasionally questioned the credibility of Dr Bawumia’s figures.
“Data released by the BoG last week indicated that Ghana’s net international reserves at the end of 2018 were $3.8 billion, which declined to about $3.1 billion by the end of February 2019. This means that the BoG had pumped $700m of our hard-earned net international reserves to stabilise the cedi,” he said.
The lecture was on the theme: “Ghana’s rising fiscal risks, financial crunch and external vulnerabilities: A postmortem of the Extended Credit Facility (ECF) Programme and a preview of the economy without the International Monetary Fund (IMF)”.
“Data from the BoG showed that $700 million was used between January and February, with an additional $300 million added in March,” Mr Adongo said.
Dr Bawumia, at the town hall meeting on Ghana’s economy last Wednesday, had stated that Ghana’s debt-to-GDP stood at 48 per cent and indicated that the economy had been performing better in the last two years than it was under the Mahama administration.
But the MP said the figures given by the Vice-President were not a true reflection of the facts on the ground because they were outdated.
He said Bloomberg Terminal, which tracks the performance of currencies worldwide, currently had the cedi as the worst performing currency in Africa and the fourth worst in the world.
He added that some $1.4 billion of reserves was used to support the cedi between 2017 and February this year, describing the action as reckless use of the country’s reserves.
Turning his attention to the GDP, Mr Adongo described Ghana’s debt-to-GDP figure, which Dr Bawumia pegged at 48 per cent, as “cooked”.
He said the Vice-President used December 2018 figures on the country’s foreign debt and added same to March 2019 domestic debt.
“As for the domestic debt, they reported up to March 2019. They remembered that they had borrowed GH¢3.7 billion which they added to their reserve and showed that the reserve is high, so me too I added it.
“And when added appropriately, based on the new series, our debt-to-GDP is 58 per cent, but Dr Bawumia claimed it was 48 per cent,” Mr Adongo, a member of the Finance Committee of Parliament, stated.
“If you use the old series, Ghana’s debt-to-GDP would be 72 per cent,” he said, adding that “this is so outrageous, considering the fact that the government is yet to experience its first election”.
Destiny in foreigners
The MP expressed worry that there was “over concentration of external debts”.
According to him, Ghana’s economy was now being held by just about three foreign investors.
“What it means is that only a few people are now holding our external debt and Ghana’s destiny is tied to Franklin Templeton and two or three other investors,” he added.
The situation, he argued, did not only compromise the independence of Ghana’s policy decision making “but also increases our vulnerability risks”.
In his view, Ghana’s monetary policy decisions could not be taken in isolation of the interest of those investors and foreign constituents as was being held by the Governor of the BoG.
“If they [the investors] decide that their interest is now better served in South East Asia and they come to take their money, the cedi will disappear. This is the state of our Ghanaian economy and this is not the one to be celebrating,” he said.
He criticised the government for sacrificing the needs of Ghanaians in order to impress the supervisors of the economy, the International Monetary Fund.
In doing so, he said, the NPP government had “continuously starved the people of Ghana”.
He said holding on to money had not only brought about hardships but also resulted in delayed investment in infrastructure.
Mr Adongo, however, maintained that while there had been efforts to align expenditure with revenue, the IMF was not impressed.
He suggested a better way to bridge the fiscal deficit would be to mobilise more revenue, instead of holding on to expenditure in a country where government spending had a ripple effect on businesses and jobs.
Other speakers at the forum were Fiifey Kwetey, the MP for Ketu South; Mr John Jinapor, the MP for Yapei Kusawgu, and Mr Ato Forson, the MP for Ajumako-Enyan-Esiam.
The rest were Professor Jane Naana Opoku Agyemang, a former Minister of Education, and Mrs Mona Quartey, a former Deputy Minister of Finance.