The Minority Leader of Parliament, Mr Osei Kyei-Mensah-Bonsu, addressing the press conference organised by the Minority caucus at the Parliament House in Accra.

Short-term prospects of economy gloomy — Minority

Mark Anthony Vinokor Politics Jan - 09 - 2015 , 00:32

The Minority in Parliament has described the short-term prospects of the economy as gloomy and urged the President, Mr John Dramani Mahama, to take all necessary steps to maximise the rate of economic development.

It also asked the government to promote the maximum welfare of every Ghanaian.

Addressing a press conference in Accra yesterday on the 2015 budget statement, the Minority Leader, Mr Osei Kyei-Mensah-Bonsu, said the gloomy nature of the economy did not provide any proper foundation for the future, hence the medium-term prospects could not be bright.

“In that regard, the transformational agenda of the 2015 budget statement and economic policy can only be a forlorn hope without basis,” he said.

According to him, the budget would neither ensure that the national economy and resources were well managed nor provide adequate means of livelihood, suitable employment and public assistance for the needy, adding that it was meaningless to the ordinary Ghanaian.

“At the end of the day, if fundamental problems with the economy are not dealt with, the threat to the macro-economic stability of the country, going forward, will not abate,” he said.

Mr Kyei-Mensah-Bonsu said the economy, although “tilted”, was not completely “broken” and could be salvaged, adding that the New Patriotic Party (NPP) was ready to rescue the economy from sinking further if given the opportunity by the electorate in 2016.

Projected sharp decline in growth

The Minority Leader said the 2015 budget showed that the economy was in decline.

According to him, real GDP growth had declined from 15 per cent in 2010 when oil production began to a projected 3.9 per cent in 2015, including oil.

The non-oil growth of 2.7 per cent projected by the budget, in his view, was disturbing.

He challenged claims by the government that the economy was recovering and said if that claim was true, then what could explain the further decline in growth in a year that the government claimed to be focused on sealing the bright prospects of the economy.

Ghana’s debt sustainability

The Minority Leader said the 2015 budget revealed that at the same time that Ghana’s economic growth had been in sharp decline, the country’s debt-to-GDP ratio had risen sharply to 60.8 per cent as of September 2014.

Ghana’s debt stock, he said, had crossed the 60 per cent of GDP level that developing countries with limited access to capital flows should worry about in terms of debt sustainability.

“As of 2008, Ghana’s total public debt stood at GHc9.5 billion (33 per cent of GDP). In the last six years, however, the stock of public debt has risen dramatically to GHc70 billion (60.8 per cent of GDP) as of September 2014. This is an increase in the stock of debt by GHc60.5 billion or the equivalent of some $27 billion, using the average exchange rate for 2009 to 2014 or $17.5 billion at the current exchange rate. This also represents an increase in the stock of debt by 106.14 per cent a year.

“This is a frightening rate of accumulation of debt by any standard or measure. On this track, Ghana is clearly on the way back to the unsustainable debt levels that pushed us to HIPC. This is a worrying development because Ghana received HIPC relief just 10 years ago after a similar debt binge by an NDC government,” he stated.

What has the borrowed money been used for?

Mr Kyei-Mensah Bonsu wondered what the $27 billion, which he said had been borrowed by the government, been used for.

He said no government in Ghana’s history had been so lucky as to have access to that volume of resources for development, adding that what was shocking about the borrowing spree was that it had happened at the time when capital expenditure as a percentage of GDP had unbelievably declined.

Bloated payroll

The Minority Leader accused the Mahama administration of complicity in the bloated nature of the government’s payroll and said it had, through the National Disaster Management Organisation (NADMO), inserted the names of its cadres to pay them money they did not deserve.

That, he said, was responsible for the huge amount of money the government had to pay as salary at the end of every month.

He advised the government to “look within” in a bid to solve the problem and stop looking elsewhere for ghost names.