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24.08.2016 Editorial

Is Ghana’s Economy resilient?

By Ghanaian Chronicle
Is Ghanas Economy resilient?
24.08.2016 LISTEN

As the December 2016 elections draw closer, political parties continue to debate the state of the Ghanaian economy. While the government is optimistic that the economy is resilient, those from the opposition have written it off.

In yesterday's edition of The Chronicle, Seth Terkper, the Finance Minister was bragging that Ghana's economy is very robust and would be more resilient in the few days to come, stressing that his ministry has put in place strict measures to ensure the economy gained grounds.

His comment followed recent backlashes from members of the opposition political parties who have argued that the Ghanaian economy, as it is now, is on the verge of collapse. The Finance Minister, however, admitted that the economy is facing some challenges, but he was quick to put up a defense, maintaining that there were better days ahead.

While addressing a press briefing in Accra, Mr. Seth Terkper debunked allegations that the economy was collapsing and went on to state that the Mahama-led administration has over the past two years developed the economy, especially when it started dealing with the International Monetary Fund (IMF).

“Ghana is on-track with IMF Programme Targets. In May 2016, IMF Staff Mission released a positive press release after their review mission to Ghana. Government understands that IMF decided to wait, so as to be able to include Parliament's feedback on the new BoG (Bank of Ghana) Act and the PFM (Public Financial Management) Bill, as well as strategy to address energy SOE debt levels in the Board's submission.

This notwithstanding, the opposition New Patriotic Party (NPP) has a different story to tell, as its Communications Director, Nana Akomea, dismissed government's assessment of the economy as resilient and robust.

According to Nana Akomea, in a story carried by The Chronicle in its Monday August 22, 2016 edition, under the headline; “Mahama's Record Is Worst… Plans massive redundancies in 2017 –NPP”, the party is baffled by the claims of President Mahama that he is laying the foundation for the economic take off and high growth of this country from 2017.

Describing the claim as deceptive, Nana Akomea in a press statement said the NDC administration under late Prof Atta Mills inherited an economic growth rate of 9.1% at end 2008, and when President Mahama himself took over in 2012, the rate had declined to 9.3%.

In 2015, however, he noted the growth rate had further declined to 4%. “We note that it is not only the growth of the economy that has retrogressed under President Mahama. Inflation was at single digit levels when President Mahama took over. Today it is over 16%.

The cedi had depreciated 4% in 2011 and GHc1.80p bought one dollar. “President Mahama's policies saw the cedi becoming the worst depreciated currency in the world (30%) in 2014. Today Ghanaians need GHc4 to buy one dollar.

“The fiscal deficit was 4% of GDP at end 2011. President Mahama in his first year 2012 took the deficit to a record 12%. Today, even under IMF supervision and 'policy credibility', the deficit is in excess of 7%.

Today, growth rates in agriculture and industry are much worse than when President Mahama took over in 2012”, he said, adding: “How do you take over an economy, make it worse and claim you have made it worse in order to make it better?

The Director of Communications of the Progressive Peoples Party (PPP), Paa Kow Ackon expressedhis pessimism over the economy, long before Mr. Terkper held his press briefing yesterday.

He told the media that the PPP do not see government debt to GDP ratio, fuelled by the unbridled government borrowing, non-existent fiscal policies to stabilise the cedi and stimulate economic activity, as an achievement.

The PPP Communications Director continued that further tightening of the domestic economy with the basic excuse of fiscal consolidation under an IMF programme and overburdening of the private sector with multiple taxes cannot be a plus for the economy.

Even though we, at The Chronicle are not economists, the economic hardship people in the country complain about, coupled with the economic situation is ample evidence to know that all is not well.

In the layman's opinion, the economy is not resilient because prices of utility bills are unbearable, dumsor continues to make its presence felt throughout the country, prices of food and other items are on the high side, taxes are too high and people continue to lose their jobs.

The Chronicle is challenging the Mahama-led administration to stop throwing dust in the eyes of Ghanaians about the economy and come up with pragmatic measures to lessen the economic hardships of the people.

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