President Akufo-Addo has already predicted that Ghana’s economic growth could fall from the current 7% to 2% by the end of 2020. He did not end there, but did his usual propaganda with his prediction and the situation Ghana finds itself as a result of the Covid-19 pandemic.
The Minister of Finance has also said Ghana has began experiencing slowdown in various sectors of the economy as a result of the pandemic. According to the finance minister, the projected 2020 real Gross Domestic Product (GDP) growth could decline by 4.2%. Government has already established a Covid-19 fund to assist the welfare of the needy and the vulnerable. The Finance Minister has also announced that government was looking forward to amend the Bank of Ghana Act to allow for it to borrow from the BoG up to 10 percent of previous year’s tax revenue.
Government has also announced its decision to go to the IMF for a bailout to support the economy. Good!
In 2012, the UN in its World Economic Situation report, captured that the 2007/8 global economic recession was still having negative effect on world economy and had weakened considerably, economies of the world. It predicted that the world economy was expected to remain subdued in the 2013/14. The report stated that the global economy was expected to grow at 2.4% in 2013 and 3.2 percent in 2014, which was a significant downgrade for the UN’s forecast the previous year. The report also stated that the pace of growth would be far from sufficient to overcome the continued jobs crisis that many countries were facing.
The economic woes in Europe, Japan and the United States, were spilling over to the developing countries through weaker demand for our exports and heightened volatility in capital flows and commodity prices. Prices of our cocoa, gold etc fell very low on the world market and the years ahead were fraught with major uncertainties and risks slanted towards the downside. In Ghana, our revenue collection system was porous, government had borrowed enough, the huge wage bill was sinking the economy and the full implementation of the single spine policy, worsened our plight.
The Mahama administration wisely, decided to go to the IMF for support to enable us improve our revenue collection system and also, instill discipline in the economy. Candidate Akufo-Addo, his Vice, Dr Bawumia, made all the ugly noises in the system and promised Ghanaians they will cancel the IMF deal if elected and the Mahama-IMF deal will be the last deal (negotiation) between Ghana and the IMF. The fact is, when faced with the challenges the Mahama administration faced between 2012 and 2014, it is essential to change the course in fiscal policy and shift focus from the usual short term consolidation to robust economic growth with medium to long-term fiscal sustainability. The administration avoided premature fiscal austerity, took bold initiatives rather than short-term adjustment. But Dr Bawumia, with all his economic prowess did not see the economic wisdom in those prudent measures.
In spite of all these challenges, the Mahama administration embarked on massive infrastructure development, adjusted salaries of workers, created new Jobs, created funds, invested in the power sector to fix the decades old power crisis and made strategic investment in the oil and gas sector.
I hope President Akufo-Addo and his propagandists have seen what global economic recession can do our fragile economy? The high percentage growth recorded so far were achieved as a result of the huge investment the Manama administration made in the oil and gas sector, the service sector, and other sectors of the economy. The world Bank, the IMF and other financial institutions in 2015, projected the growth figures recorded and firmly stated that Ghana will achieve the projected growths as a result of Mahama’s investments. So, with all the revenue from the oil sector, Covid-19 has weakened the economy and the growth projection has suddenly dropped from 7 % to 2 %.?
I was expecting the President and his finance minister to apologise to Ghanaians for deciding to go to the IMF after all the remarks they made about IMF support on their campaign platforms. Instead, he decided to continue with his blame game, propaganda and lies.
Did I hear the President say his government has the magic wand to turn things around after the pandemic? Isn’t that interesting? Apart from the revenue his administration is accruing from the oil sector ( made possible by the Mahama administration), the support the Atuabo gas project is giving to the administration, the stable power we enjoying as a result of Mahama’s investment, the improved service sector (as a result of Mahama’s investment), the renovated ports and massive infrastructure development by the Mahama administration, what has he done for Ghanaians to fall for his promise. The Exim bank established by the Mahama administration is supporting its projects and now, have decided to touch the Heritage fund.
As the supply chains around the world are disrupted, the full impact of the Covid-19 pandemic is yet to be felt. The pandemic will have devastating effects on the global economy that will certainly be more intense than and distinct from those felt during the 2008-2009 global financial crisis. It is now clear that government does not have enough resources to address the converging crises in the health and economic spheres. The way forward will likely involve, in additional to international support, both strategic measures to ease the impact of the pandemic and long-term planning to build a more robust economy and inoculate it against future shocks like Mahama did between 2013 and 2015 culminating in the 7 to 8 % growth the IMF and the World Bank projected. This not the time for data manipulation and paying millions of our taxes to local and foreign media houses to project the government.
Source: Ohenenana Obonti Krow