Ghanaians going to get poorer – Akuffo Addo

Nana Addo Dankwah Akuffo Addo has critically diagnosed the President Mills lead administration and described the economy of Ghana as ’shrinking’. Ghana, as it stands is not promising as many Ghanaians are going to get poorer. The World Bank has estimated that half a million more Ghanaians will fall below the poverty line by this year alone.

Speaking to journalist at his resident at Nima, the 2008 Presidential Candidate of the New Patriotic Party (NPP) said “under the ‘Better Ghana’ agenda, Ghanaians are for the first time in almost a decade, going to get poorer. We are hamstrung with a government that appears to be incompetent even at managing and maintaining the economy the NPP bequeathed to them. They have succeeded in turning a growth rate of 7.3% that they inherited to between 3-4%. We are moving backwards; slowly but surely. Ghanaians are yearning to feel Prof Mills’ presidency and not just his residency at the Castle”.

Statistics released last Friday from the Bank of Ghana makes grim reading. Data from the Bank of Ghana’s Composite Index of Economic Activity (CIEA) which is used in gauging the pulse of the economy, shows the decline in economic confidence deepening during the first two months of this year, implying a slowdown in the pace of economic activity. According to Kwesi Amissah-Arthur, the Governor of the Bank of Ghana, “the factors contributing to the declining index were: [low] imports, tourists spending, private sector transfers to social security, consumer spending (derived from VAT collections) and commercial banks’ credit to the private sector.”

According to Nana, what this means is that Ghanaians no longer have enough money to spend on consumer goods and local manufacturers simply don’t have the demand to import the requisite capital inputs. “While the Governor of the central bank is telling us that transfers to SSNIT has fallen, the Minister of Information is propagating that 1.6 million mystical jobs have been created from the halo of a better Ghana in just one year”.

He accused the Mills government for lying to Ghanaians about the 1.6million jobs created . With a declining economy can government revenue grow? Well, unless through increasing taxation and tolls. Bad officials must be dealt with according to law. However, the President should stop blaming hardworking CEPS officials for revenue declines and direct his anger positively at dealing with the fundamental problem of growing the economy.

It is of course refreshing to know that headline inflation has now dropped to 13.2%. The basic economic principle of demand and supply means you can beat inflation simply by reducing the purchasing power of the people – by impoverishing the people.

The relative stability this year, helped by strong commodity prices for our exports and reductions in both public and consumer spending, has been achieved by factors other than the competence of the present administration. It does not demonstrate imaginative or competent economic management. Any Senior High School economics student can stabilise an economy by choking it off, which is exactly what the NDC has done.

The challenge of economic management is to maintain stability while growing the economy even in the face of a global economic crisis. The entire economic policy of the Mills-Mahama government has been premised on a false understanding of the actual state of the economy. We were first told that the size of Ghana’s economy was around $16 billion and the fiscal deficit was about 15% of that, an ailment which called for appropriate remedy of very tight fiscal discipline. Just recently, both the International Monetary Fund and the Ghana Statistical Service came out to say that in fact Ghana’s economy could be twice as large and may be more than $30 billion.

This immediately cuts the percentage of the nation’s fiscal deficit by half. So Ghanaians have been forced to suffer based on false statistics and the obsession of a new government to make its predecessor look bad.

Petroleum prices and electricity tariffs are about to go up, while there are no signs of corresponding increases in workers wages and salaries.