‘Ghanaians Paying Dearly For Economic Mismanagement ‘

Minority Leader, Osei Kyei Mensah-BonsuAfter six years in office, Ghanaians are now being asked to pay dearly for the economic mismanagement and corruption of the ruling government, resulting in economic decline, debt unsustainability, unemployment and rising cost of living in the country.

The Minority Members of Parliament said this at a news conference they addressed in Accra yesterday, to react to the budget statement presented to Parliament by the finance Minister, Seth Terkper recently.

The Minority Leader, Osei Kyei Mensah-Bonsu, who read the statement, noted that the 2015 Budget Statement and Economic Policy of the ruling government failed to address the sufferings of the people, adding that Ghanaians have been terribly disappointed.

He stated: “The 2015 budget provided no relief to the suffering of Ghanaians, after six years of National Democratic Congress (NDC) government.

“Indeed, the 2015 budget rather actually increased the suffering of Ghanaians by implementing some rather harsh tax measures and failing to address the fundamental issues of concern”.

Mr. Mensah-Bonsu further lamented that in a bid to raise revenue to cover the mess they have created, the NDC government had resorted to taxing everything in sight.

Sharp Decline In Growth

Mr. Mensah-Bonsu, who is also the New Patriotic Party (NPP) MP for Suame in Kumasi, noted that; “the 2015 budget shows an economy in decline.

“After six years in government, during which the NDC claimed “unprecedented economic growth” in 2011, the harsh truth is that real gross domestic product (GDP growth) is in decline”.

According to him, real GDP growth had declined from 15% in 2011 (with the onset of oil production) to a projected 3.9% in 2015 (including oil).

He indicated: “The budget is projecting non-oil growth of 2.7% in 2015. These facts are as revealing as they are disturbing. The government is claiming that the economy is recovering.

If indeed the economy is recovering as indicated by the government, and we have ‘turned the curve’, what will be explaining the further decline in growth in a year that claims to be focused on sealing up the bright prospects of the economy? What sort of recovery sees real GDP growth decline from a purported 6.9% in 2014 to 3.9% in 2015? ”

Mr. Mensah-Bonsu predicted that the growth rate in 2015 would be just about what it was in the year 2000 and less than one-half the rate of the 8.4% achieved in 2008 without oil!.

Non-oil growth in 2015 will be below the growth rates attained in 2000! The decline in real GDP growth is reflected in all the sectors, (Agriculture, Industry and Services).

In the midst of this deep decline in economic activity, they wondered what scope exists for the Minister for Finance to rake in revenues to support infrastructure development and meet Government’s statutory obligations.

Mr. Mensah-Bonsu, flanked by his colleague MPs, also raised concern with the GDP growth rates of government, insisting that they lack credibility.

He asked: “How can an economy which went through so much turmoil in 2014, with a colossal 75% depreciation or even if we take the official figure, 69% depreciation of the currency and massive load shedding register real GDP growth of 6.9% only to decline sharply to 3.9% when the government claims the economy is transforming or recovering”.

Is the recovery in reverse gear? Our view is that the 6.9% real GDP growth reported by the Ghana Statistical Service needs to be re-examined. Otherwise, the government should explain the reason for this sharp decline in real GDP growth in 2015, he stated.

This, Mr. Mensah-Bonsu said, was important because if the real GDP numbers for 2014 were overstated, it would have implications for the 2015 projections and policies.

This notwithstanding, he said the fact remains that the economy that was inherited by the NDC government in 2009 was growing at 8.4% without oil.

Having become an oil producer, the government has superintended over a precipitous decline in real GDP growth from the supposed 15% or 14% (depending on which lense one uses) in 2011 to a projected 3.9% in 2015.

Let us put this into perspective — the economy has lost steam equivalent to 11% of GDP since 2011 suggesting that for a $50.0 billion dollar economy, almost $5.0 billion dollars worth of economic activity has disappeared, and this is worrying.

Slow growth means higher unemployment, higher prices and declining revenues. In this respect, the NDC administration has woefully failed Ghanaians and one is deeply worried about the depth to which the economy is sinking, according to the MPs.

Debt Unsustainability

Touching on debt unsustainability, the Minority said the 2015 budget revealed that at the same time that Ghana’s economic growth has been in sharp decline, Ghana’s Debt/GDP ratio has sharply risen to 60.8% of GDP as at September 2014.

“Ghana’s debt stock has crossed the 60% of GDP level that developing countries with limited access to capital flows should worry about in terms of debt sustainability,” they noted.

As of 2008, Ghana’s total public debt stood at GH¢9.5 billion (33% of GDP). In the last six years however, the stock of public debt has risen dramatically to GH¢70 billion (60.8% of GDP) at September 2014.

This is an increase in the stock of debt by GH¢60.5billion or the equivalent of some $27 billion using the average exchange rate for 2009-2014 or $17.5 billion at current exchange rates.

This also represents an increase in the stock of debt by 636%over a six year period (i.e. an average increase in the stock of debt by 106.14% a year).

 African Eye News.com

 

 

 

Related posts

Leave a Reply

*