FLASHBACK: Bawumia blames Ghana's IMF request on 'quadruple whammy'

Vice President Dr. Mahamudu Bawumia blamed Ghana's economic challenges on what he described as a quadruple whammy.

He said the energy sector excess capacity payments, the banking sector clean-up, the COVID-19 pandemic, and the Russia-Ukraine war exacerbated Ghana's economic crisis.

“Of the four factors, two (COVID-19 and the Russia-Ukraine war) were external and the other two (the banking sector clean up and the excess capacity payments) were the result of policies of the previous government,” he said.

Read the full story originally published on July 14 2022 starrfm.com.gh

Vice President, Dr Mahamudu Bawumia, has blamed Ghana’s economic challenges resulting in an IMF bailout request on what he describes as a quadruple whammy.

According to him, the energy sector excess capacity payments, the banking sector clean-up and the COVID-19 impact on the economy triggered the IMF situation for the country.

“The Ministry of Finance estimates that the interest payment on this borrowing for the three items amounts to GH¢8.5 billion annually. This is some 23% of Ghana’s annual interest payments of GH¢37 billion,” he said while speaking at the Accra Business School on Thursday, July 14, 2022, under the theme: ‘The Role of Information Technology Education in the Government’s Digitalisation Agenda’.

He added: “It should be noted that without the GH¢54.0 billion debt for the three exceptional items (COVID-19, Financial Sector and Energy), Ghana’s debt to GDP would be within the sustainability threshold of some 68% instead of the 76.6% at the end of 2021.”

“If you take out the fiscal impact of this quadruple whammy, Ghana will not be going to the IMF for support because our fiscal, debt and balance of payments outlook would be sustainable.

“Of the four factors, two (COVID-19 and the Russia Ukraine war) were external and the other two (the banking sector clean up and the excess capacity payments) were the result of policies of the previous government.”

Meanwhile, the Minority in Parliament has shot down a one-billion loan by over what they describe as inconsistencies in the agreement by government.

According to the Minority, government must provide further details on the facility before any decision can be taken on the loan.

Speaking to Starr News after a Finance Committee meeting to consider the US$750 and $250 million agreements, Ranking Member, Cassiel Ato Forson pointed out some concerns of his side over the deal that have not been addressed.

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