Majority, Minority leaders disagree on economy ••• As SONA debate ends

Parliament last Friday concluded the seven-day debate on the President's message on the State of the Nation, with Majority Leader, Osei Kyei-Mensah-Bonsu, and his Minority counterpart, Dr Cassiel Ato Forson, taking their turns.

While Mr Kyei-Mensah-Bonsu argued that the government had performed quite creditably in economic management, Dr Forson contended that the economy was in a bad and difficult situation.

Their debate focused on sectors such as education, energy, roads, industry, agriculture and economic indicators -borrowing, inflation, depreciation of the cedi, debt exchange programme, COVID-19 expenditure and IMF engagement.

Reckless borrowing  

Kickstarting the debate, Dr Forson painted a gloomy picture of the  economy, saying the New Patriotic Party (NPP) would be remembered for inheriting a healthy economy and sending it into the mortuary.

Tracking the trajectory of the six-year governance of President Nana Addo Dankwa Akufo-Addo, Dr Forson said the government had been overshadowed by reckless borrowing and channelling a large portion of the "resource envelope" into consumption expenditure, asking “where is the money”.

According to him, a misconception was created in the President's address to the effect that the resources were used for the construction of roads.

"Mr Speaker, even if you stretch this to include capital expenditure, the government spent only GH¢6.3 billion out of the GH¢59.6 billion for road construction representing 10.6 per cent of the total resource envelope.

According to him, GH¢54 billion of the revenue receipt in 2017 alone went into consumption.

Also in 2018 alone, he said the money received from both tax and non-tax revenues was GH¢47.6 billion and the government borrowed GH¢33.1 billion making a total receipt of GH¢80.7 billion but only GH¢491 million was used on roads with the remaining balance on consumption.

According to him, the true state of the nation was that Ghana had become poorer with high cost of transportation making life unbearable for the ordinary people, adding that the cost of doing business had become expensive with high-interest and inflation rates.

He said the President and his team had been wasteful in their resource allocation, saying the crisis Ghana found itself in now was self-inflicted.

He called on the President to empathise with the citizenry by cutting down on the size of his government by reducing the number of employees at the presidency.

Fastest-growing economy 

Taking his turn, Mr Kyei-Mensah-Bonsu said the evidence of President Akufo Addo’s performance had been in the standard economic indications, with GDP growth averaging seven per cent between 2017 to 2019, reducing inflation to its lowest level at 7.8 per cent in January 2020 since the rebirth of Constitutional democracy, having a fiscal deficit below five per cent of GDP for three consecutive years, which was the first in over 40 years, having a surplus balance of trade for three years running and low-interest rates.

He said Ghana’s seven per cent average annual GDP growth placed it among the league of the fastest-growing economies in the world in three years. The International investor community recognised this fact and that was why Ghana became the largest recipient of foreign direct investment in the West African sub-region. 

All those indicators, he said, had registered strongly until February 2020 when COVID-19 struck, causing lockdowns and closure of airports and land borders while schools, markets and factories shut down, with tourism and hospitality crumbling.

Phenomenal growth

In 2017, he said the ECOWAS regional economy grew at 2.8 per cent; yet, Ghana grew at 8.1 per cent up from 3.4 per cent in 2016 and while in 2018, the ECOWAS average was 3.5 per cent, Ghana’s economy grew at 6.2 per cent. 

With Ghana, for close to 40 years, never witnessing a situation where the next succeeding year’s GDP had outperformed the previous year’s growth by 100 per cent, he said in 2017 the Akufo-
Addo’s administration’s GDP figures outperformed  that of John Mahama’s administration in 2016 by 182.5 per cent. 

In 2019, he said the ECOWAS average GDP growth was 3.5 per cent; yet, under Akufo- Addo, the economy grew by 6.5 per cent

“That means that in the first three years of Akufo-Addo’s administration before COVID-19 struck the GDP growth averaged 7.0 per cent. This compares with the last three years of John Mahama’s administration when there was no COVID-19, no Russian-Ukraine conflict, and yet GDP growth rate on the average was 2.8 per cent,” he said. 

In 2022, he said Ghana’s GDP registered a provisional growth of 3.6 per cent.

 “That is the worst GDP growth under Akufo-Addo but even that is higher than the 3.4 per cent in 2016 bequeathed by the John Mahama administration.