Despite painting a rather gloomy picture of the Ghanaian economy he inherited from the previous National Democratic Congress (NDC), President Nana Akufo-Addo has stated that, he was not elected to complain about the liabilities, but to fix things and make life better for Ghanaians.
Delivering his first state of the nation address to Parliament today [Tuesday], Nana Akufo-Addo bemoaned what he called fiscal indiscipline that has seen the country’s debt stock now being 74% of its Gross Domestic Product (GDP).
“Too much time, energy and resources were spent in the past in my view, without a deliberate conscious assessment of the impact on jobs and whether or not we were spending wisely to improve the lives of the people, communities and businesses. But I was not elected by the overwhelming majority of the Ghanaian people to complain. I was elected to get things done; I was elected to fix what is broken and my government and I are determined to do just that.”
According to the President, the previous administration also missed all the targets under the International Monetary Fund (IMF) programme due to reckless expenditure and a mismanagement of the economy.
“I am in a hurry to put a government together. Our economy is in a bad state. Our worse fears have been confirmed. Ghana missed almost all its targets under the IMF Fiscal indiscipline reared its head in 2016. 7 billion cedis arrears had not been recorded. Fiscal indiscipline reared its head in 2016 despite promises in 2012.”
“Ghana’s debt stock in 2008 was 9.5 billion cedis but in 2016 the debt is now 122 billion cedis which is 74% of GDP. We will implement tough, prudent and innovative policies to rescue the economy. After eight years of NDC there is no fiscal space. The country now has to borrow for everything. Our economy growth rate has shrunk. Our GDP is estimated at 3.6% lowest in about 23 years.
The President said 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 result 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.”
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.
By: Ebenezer Afanyi Dadzie/citifmonline.com/Ghana
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