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The minority in parliament accused the Akufo-Addo government of hiding the correct budget deficit for the year 2020, which, in its calculations and analyzes, is 17.5% instead of the 11.7% declared by the interim minister of Finances Osei Kyei-Mensah- Bonsu when he presented the budget to the legislature on Friday March 12, 2021.
The Caucus said that “mismanagement and uncontrolled spending and sheer lack of prudence explained the poor performance of the economy and not just COVID-19.”
In a statement, the minority noted that “for fiscal year 2019, the government reported a budget deficit of 4.8% of GDP while at the same time, as confirmed by the IMF in its report of April 2020, a budget deficit of 7.5% of GDP. “
“This means that an amount of approximately GHS 8.2 billion has been concealed within our spending framework.”
“We demand that the budget deficit, including arrears for the year 2020, be corrected in the budget statement to reflect the actual figure of 17.5% of GDP.
“The budget deficit for the year 2020 of 13.8% of GDP, as reported by the Ministry of Finance, excludes an amount of GHS 6.2 billion, what the government calls payments to the energy sector. “
“We demand the inclusion of energy sector payments of GHS 6.2 billion in the budget tables to reflect the corresponding budget deficit.”
On Saturday March 13, Bolgatanga Central lawmaker Isaac Adongo made similar statements, insisting the deficit was over 18%.
He said the 11.7 percent cited by the interim finance minister was an approximate figure.
Mr. Kyei-Mensah-Bonsu told the House in his presentation that “although the full 2020 gross domestic product (GDP) data has not yet been released by the Ghana Statistical Service, provisional data for the three first quarters of 2020 ”showed that“ targets for most macroeconomic indicators are largely on track ”.
The Parliament majority leader presented the following as a summary of national macroeconomic performance for 2020:
a. The overall average real GDP growth for the first three quarters of 2020 was 0.2%, compared to 6.0% for the same period in 2019. The projected outlook for 2020 is 0.9%, reflecting the impact of the COVID-19 pandemic;
b. Real non-oil GDP grew on average by 0.4% in the first three quarters of 2020. The projected outlook for 2020 is 1.6%;
vs. Inflation at the end of the period was 10.4% in December 2020, against the revised target of 11.0%;
re. The overall budget deficit on a cash basis was 11.7 percent of GDP, excluding financial sector clean-up costs, against a revised target of 11.4 percent of GDP;
e. The primary balance recorded a deficit of 5.3 percent of GDP against a target deficit of 4.6 percent of GDP;
F. Gross international reserves accumulated to US $ 8.6 billion, equivalent to 4.1 months of import coverage, slightly above the target.
However, Mr Adongo, who has expressed his wish to be the future finance minister to pull Ghana out of its economic slump, took issue with the parliamentary affairs minister’s figures when he spoke with Eugene Bawelle about the program. news from Class91.3FM “ The Watchdog ”.
In the opinion of the opposition lawmaker, “the Ghanaian economy had very severe underlying conditions before the arrival of COVID-19”, insisting that the pandemic “simply exploited the underlying conditions severe impact on our economy and collapsed ”.
“You couldn’t run an economy with a 7% deficit down to 9 percentage points – something percent and come to the people of Ghana and hide that and tell us it’s 4% and when you now go get some money. money at the IMF, you said in 2018 you had a 7% deficit which was the first time we heard that Ghana had a 7% deficit even though on the floor [of Parliament], when we debated these budgets, some of us argued that the deficit was baked and that it was more than that ”.
“Now they agree it was 7 percent. Then they said in 2019 they did 7.3% and then they said in 2020 they were forecasting something around 9.5% and as we speak they said 11.7%, but I can show you that the deficit is over 18%. “.
As far as he is concerned, weak economic fundamentals which he said were being hidden by the government, provided fertile ground for the pandemic to sink in.
“So you can’t have an economy like this and survive COVID-19. Obviously this is a very serious underlying condition that equates to diabetes and seriously your economy is going to collapse, ”he noted, stressing,“ You cannot have an economy that has started to collapse. grow; when you inherited it you said the economy was terrible and yet this terrible economy gave you about 7% growth. It fell in 2018 to 6.3%, then in 2019, you made 6.1% and now you are growing by 0.2% ”.
That, he stressed, “should tell you you didn’t have the kind of economy you painted, but the president tells us he grew the economy at an average of 7 percent. “.
“The available data does not support this. If you read the data that we submitted to the IMF, we said that in 2018 we did 6.3%, 2019 we did 6.1% and we plan to do 1.5% in 2020. In fact, 2020 ends at 0.2 percent. So how can you put it all together and get an average of 7 percent? Obviously, the president has not told us the truth and that is the nature of the economy we are leading, ”Adongo said.
In addition, Mr. Adongo said that the government’s deception of the performance of the economy has come to light.
“They keep telling us that the primary balance has always been positive for three years. Now what this means is that they have told us that they have been able to generate so much income that they are not borrowing to pay the interest on the loans Ghana has taken. This is what a positive primary balance means. But it turned out, when they reported to the IMF, that they said that in 2018 the primary balance was not positive after all. It was -1.4 percent. This means that we are borrowing now to pay our interest charges and when you borrow to pay your interest charges what you do is you build up your loan portfolio, you build up your public debt and your public debt will increase at a faster rate. Then they said that in 2019 they got another -1.8%. Then they said now they expected a -4.1 percent and it ended at -5.3 percent ”.
“So this means that we are now making up our debt portfolio at a faster rate than we should and these are the underlying conditions that COVID hates and then decided to collapse the economy,” he said. he declares.
When asked if he liked being in the running of affairs in the gloomy conditions he painted, Mr. Adongo replied, “To be honest with you, the NDC is the only political party capable of taking the lead. toughest decisions to turn around the economy. “.
He recalled: “What we experienced in 2014, 2015, I can not imagine that these people manage this difficulty. In 1983, Ghana experienced the worst economic crisis in its history. As a child, I stood in line for several kilometers to buy bread and milk for the family. Even COVID won’t let you line up for miles to get basic items like soap, sugar, milk, and bread so you can eat at home. And yet His Excellency Jerry John Rawlings took some of the most difficult political steps at the time to turn the economy around ”.
“You will recall that he introduced the structural adjustment program with the economic recovery program, which was accompanied by the action program to mitigate the social cost of adjustment (PAMSCAD) and all the difficulties that we encountered », He said.
“And, therefore, we are the masters of turning around tough economies and I really really would [relished] the opportunity to be the star in the room, ”he said.
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