President Nana Akufo-Addo has stated that he will not allow Ghana’s economy to collapse under his watch, despite inheriting a challenging economy from the previous National Democratic Congress (NDC) administration. He gave the assurance while making some revelations on the state of Ghana’s economy during his maiden State of the Nation Address to Parliament.
State of economy The President revealed that, the “reality of Ghana’s finances are quite stark as a result of policy choices.” According to him, “we find ourselves in the situation where Ghana’s total revenue is consumed by three main budgetary lines. Wages and salaries, interest and payments and amortisation and statutory payments.” These three items alone, according to him, account for 99.6 % of Ghana’s revenue.
He said the alarming situation will require his administration to resort to borrowing to finance government projects. “This means that anything else that government has to do outside of these lines would have to be financed by borrowing or aid. After eight years of the previous government, there is practically no fiscal space left.
The persistent resort to borrowing for any additional expenditure is also not sustainable. We cannot continue this way with our public finances. I will not allow this economy to collapse under my watch.” Despite highlighting these challenges, the President said his administration will “reduce significantly the fiscal deficit this year.” Ghana’s economic growth declining According to him, Ghana’s economic growth has also declined significantly.
“Notwithstanding the record amount of financial resources of the disposal of the previous government, Ghana’s GDP growth in 2016, including oil, is estimated at 3.6 percent. This is the lowest GDP growth in about 23 years,” he said. Economy under Mahama Statistics from the Bank of Ghana as at September 2016, shows that, President Akufo-Addo inherited an economy valued at GHc44, 608.1 million from the erstwhile John Dramani Mahama administration.
In his last State of the Nation Address in January 2017, Mr. Mahama among other things, explained that under his tenure, Ghana’s currency, the cedi’s depreciation was around 4% in 2016. He also added that, the public sector debt stock dropped from 72% to 35%. According to the former President, Ghana continues to be West Africa’s second largest economy with a Gross Domestic Product (GDP) of almost $39 billion.
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