Economy better under Akufo-Addo than Mahama despite GH¢236.1bn debt stock – Otchere-Darko

Mr Gabby Asare Otchere Darko has said President Nana Addo Dankwa Akufo-Addo is managing the economy far better than ex-President John Mahama did despite Ghana’s debt stock ballooning from GH¢122.2 billion at the end of 2016 to GHS236 billion at the end of March 2020.

Despite the 93.1% increase in the country’s debt stock, Mr Otchere Darko, who is the President’s cousin and the founder of the Danquah Institute, said Ghana is witnessing the lowest rate of debt accumulation under any government since President Kufuor handed over to President Atta Mills.

In his opinion, Ghana's debt stock has been managed better under the Akufo-Addo government than the previous eight years under the National Democratic Congress (NDC).

He explained in a Facebook post that: “For example, between Jan 2009 and Jan 2013, Ghana’s debt stock increased by 267%, from GH¢9.7 billion to GH¢35.6 billion, respectively. Between Jan 2013 and Jan 2017, the increase was 243% – from 35.6 billion to 122.2 billion cedis.

“We still have 7 months to go to know where it will end us; but as at March 2020 the increase in debt stock since the NPP took office had been kept under 100%. The NDC average was 255% every 4 years.”

Meanwhile, the Ranking Member of the Finance Committee of Parliament, Cassiel Ato Forson, has said President Akufo-Addo and the New Patriotic Party (NPP) should be voted out because of the growing public sector debt under their watch.

Mr Ato Forson noted in a statement on Monday that President Akufo-Addo's debt accumulation is almost akin to Ghana's entire public debt since independence.

“It is even more troubling to note that if the public debt is shared among all Ghanaians, each of us owe a whopping GH¢7,836.00. I have been looking at the Summary of Economic and Financial Data for May 2020 as put out by the Bank of Ghana. It is intriguing to observe that Ghana's total debt stock as of March 2020 stands at GH¢236.1 billion,” he said.

He added: “The data further reveals that Ghana’s debt increased from GH¢120.3 billion in December 2016 to GH¢236.1 billion by 31st March 2020”.

“Despite his vociferous public debt politics in opposition, President Akufo-Addo has added some GH¢116 billion to our public debt in just 3 years and a few months. Indeed, we have to #KickNanaOut”, adding: “Analysed closely, President Akufo-Addo's debt accumulation is almost akin to Ghana's entire public debt since independence. It is even more troubling to note that if the public debt is shared among all Ghanaians, each of us owes a whopping GH¢7,836.00.”

Below is Mr Forson’s full statement:

I have been looking at the Summary of Economic and Financial Data for May 2020 put out by the Bank of Ghana. It is intriguing to observe that Ghana's total debt stock as of March 2020 stood at GH¢236.1 billion. The data further reveals that Ghana’s debt increased from GHS120.3 billion in December 2016 to GH¢236.1 billion by 31st March 2020. Despite his vociferous public debt politics in opposition, President Akufo-Addo has added some GH¢116 billion to our public debt in just 3 years and a few months.

Indeed, we have to #KickNanaOut

Analysed closely, President Akufo-Addo's debt accumulation is almost akin to Ghana's entire public debt since independence. It is even more troubling to note that if the public debt is shared among all Ghanaians, each of us owe a whopping GH¢7,836.00.

There are other observations I must proceed to highlight:

First, it is wrong for the Bank of Ghana to express the actual public debt as at 31st March 2020 as a percentage of the projected GDP for end of the year, that is December 2020 which creates an obvious erroneous impression.

Secondly, BoG is using December 2020 projected nominal GDP of GH¢398,048 billion instead of the official projected nominal GDP of GH¢385,251 billion which the government shared with the IMF in April 2020.

In effect, the Bank of Ghana is deliberately using a higher Nominal GDP to create the false impression that government's nominal debt as percentage of GDP is low. This is intellectual dishonesty and dangerous not only to Ghanaians but to the investor community. This is not only shameful but goes a long way to damage the otherwise reputable image of the BoG.

Bank of Ghana should be reminded that it is not a political institution but an important technical and professional institution of State whose reputation is very crucial to Ghana's economic progress.

I, therefore, call on the BoG to as a matter of urgency come clean and rectify what is now an exposed plot to deceive Ghanaians and the investor community.

Thirdly, I wish to draw the attention of the Governor and the Minister of Finance to Section 30 of the Bank of Ghana Act, 2002 (Act 612) as amended by the Bank of Ghana (Amendment) Act, 2016 (Act 918) regarding the breach of the ceiling for central bank financing that has occurred.

The 2019 Domestic Revenue was GH¢51,988.01m and 5 per cent of this is about GH¢2,599.40m

Regrettably, the Bank of Ghana has already disbursed GH¢5.5bn to finance Government of Ghana's operations without recourse to the laws of Ghana.

In clear terms, the Bank of Ghana has printed GH¢5.5bn to finance GoG’s operations and is planning to print even more. This is a flagrant breach of the Bank of Ghana Act.

The Minority in Parliament, therefore, cautions the Governor of the Bank of Ghana, that there are consequences for his actions.

In any case, why has the Bank of Ghana become an extension of the Ministry of Finance? Instead of government aggressively embarking on fiscally austere measures such as pruning down the size of government by cutting down the number of government appointees to make savings, government is rather stampeding the resources of the Bank of Ghana at will.

It is time to end the financial recklessness and give way to prudent and credible management of the economy to avoid this #TotalFailure