Ghana's economy as weak as Greece's - Akoto Osei

A ranking member of the Finance Committee in Parliament, Dr. Anthony Akoto Osei, has likened Ghana's economic situation to that of Greece but says Ghana has no bail out route from the European Union.

Ghana's economy has slumped in the past years due to various factors including the energy crisis which that hit the country in the last three years. The economy, however, has begun to pick up, which the President John Mahama has attributed to prudent economic management by his government.

But Dr. Akoto Osei says Ghana's economy is likely to collapse like that of Greece if emergency measures are not taken, noting “Our interest rates are high which isn’t really surprising as Malawi is the only other country that has a higher interest rate than us and that is not surprising because we live in Ghana."

He noted Ghana in 2011 used to grow when the oil full production hit between 14 and15 percent but said that has changed now because "we are down to what is projected to be around 4 percent and certainly there are a lot of countries above that which is factual.

“I have gone to borrow money recently and I borrowed it at 36 percent [interest rate] which is a private loan and I believe businesses may get between 29 and 32 per cent and how are they going to compete," he said.

Dr. Akoto Osei blamed the current economic situation to what he said is the government's too much borrowing from the domestic market, and rejected claims that the economy is resilient.

“On interest payment just to service our debts this year, we may pay over 11 billion Cedis on interest payments and if you add a wage bill 12 billion [Cedis] then you are around 23 billion [Cedis] so how much taxes are you going to collect to be able to do development," he argued

He said it is not surprising that Ghana is not growing because of capital expenditure and also GDP ratio has been on the decline. He added: "We can only grow when we invest, so if you are growing slowly, then you can be resilient and I think we should deal with the facts and see how we can turn it around"

“As I speak to you, the challenges in the energy sector, if not resolved, will collapse the economy as VRA by itself owes about 1.7 billion cedis and we say that the economy is resilient? We are like Greece now” he stated.