Economist demands evidence of Minister's $2bn loss claim

Ghanaian Economist Dr. Theo Richardson has called on the Minister of Trade and Industry, Haruna Iddrisu to provide evidence of his claim that Ghana lost $2billion in foreign direct investment (FDI) during the eight months of the presidential election petition hearing in the Supreme Court.

“The Minister would need to tell us how they arrived at that figure – what study they conducted, who conducted the study, the basis of the study and when that study was conducted. This would add to the credibility of his claim,” he argued.


Haruna Iddrisu said on Joy FM Super Morning Show that the recent historic election petition which lasted for eight months cost the country $2billion in moneys that foreign investors held back because they were not sure of the stability of the country after the determination of the case.


But Dr. Richardson told Adom News that what the Minister said is possible, but it was not enough for him to have just thrown figures out there without telling Ghanaians how he arrived at those figures.


“The Minister would need to show us how much investment we used to get before the court case and what we got during the eight months of the court case so we can see the clear evidence of his claim,” he said.


The Economist said it would also be important for the Minister to tell Ghanaians which sectors were mostly affected by the loss he is claiming, saying that “we are all aware that most of the investments that come into this country go to the extractive sector – mainly mining and recently the oil and gas sector.”

He argued that a comprehensive report on how government arrived at that $2billion would also give direction to government, its development partners, economic analysts like him, businesses in the country to chart a common path towards a recovery.


Dr. Richardson noted that during the election petition hearing, several things slowed down in the country, but FDI in particular started dwindling long before the 2012 election and the resulting eight-month-long court case.


According to him, it is normal for investors to be apprehensive about how much they invest into a particular country just before a political election, because they are usually uncertain about whether the country would or would not remain politically stable after the elections.


“For a country like Ghana where democracy is still at its growing stage investors would always have uncertainties about post-election stability of the country,” he said. “This year the court case protracted the uncertainty about the political stability of the country and that definitely slowed down investment.”


But the Economist also argued that whereas the court case may have further slowed down investment, government also did not do much to promote investment during the eight months of the Supreme Court hearing.

He noted, for instance, during the eight months, the cedi suffered a high rate of depreciation against the main international currencies, whiles the prospect of inflation rising was high and that posed a threat to the profitability so investors naturally held on to their money.


“In essence, the court case increase political uncertainty and compounded the problem of low investment even though it was not the main causal factor of low investment. We can only describe the court case as a secondly causal factor of low FDI,” he said.


Dr. Richardson recalled that during the court case period, the uncertainty about political stability of the country pushed Tullow Oil out of the country and that affected inbound investments because the oil and gas sector is one of the major FDI channels.


He however maintained that US$2nbillion is a huge figure so the Minister needs to provide a comprehensive explanation to support his specific claim.