CAUCUS FOR DEMOCRATIC GOVERNANCE, GHANA(CDG--GH)
The Caucus for Democratic Governance, Ghana (CDG—Gh), is shocked to note that, our economy is showing signs of collapse, after three weeks of stresses and strain , as a result of COVID-19. The so called robust Ghana economy is on its knees struggling for breath, when other weak African economies are running.
ONE BILLION DOLLARS
The Ghana Government is among the first few victims, to cry to IMF for a life line, three weeks after the COVID -19. With cooked figures which did not reflect the 2020 budget statement, she received first one hundred million dollars ($100m) and a month later one billion dollars (1,000,000,000) from IMF. As I write, Ghana Government is also negotiating with World Bank for a bail out. The question is: where is our internally generated reserves for emergency situations like the COVID-19?
Very often we are told Ghana has one of the best economies in Africa. The economy is proudly described as robust and one of the fastest growing economy in Africa. However the speed with which our economy has run into crises, sending her to Intensive Care Unit shows the serious weaknesses in the economy. Sadly the so called weak economies in Africa have enough internally generated funds and are yet to call on IMF for help. Besides the pressure on economy in other countries in the world are far higher than in Ghana.
BELOW IS THE COOKED FIGURES IN THE 2018,2019 BUDGET AND FIGURES IN IMF REPORT 2020
INDICATOR DATA FROM BUDGET DATA FROM IMF
Fiscal Deficit of GDP
Primary Balance (% of GDP)
Balance (% of GDP)
Reserves (millionsof US$
Source : Budget statements, Ghana(2019, 2020) and IMF Statement ( 2020)
We have always suspected that our economy is fragile looking at the polished macroeconomic figures which Government since 2017 has been presenting. Indeed experts on economy have often criticized the macroeconomic figures because it did not reflect the realities on the ground. Prices of food items are so high. Fuel prices are high, transport prices are high, the cedi is rapidly depreciating, and yet we kept boasting of economic recovery until COVID-19 exposed the weaknesses in the economy.
It is always advisable to bite what you can chew. The Government out of cheap popularity stupidly started pumping all available reserves into the badly planned free Senior High School (SHS) project; thus weakening the basic structures upon which the economy is built. As if that was not bad enough, the Finance Minister was engaging in creative accounting, where a number of debts are put under the base line to escape accounting. To make things worse, this Government has borrowed heavily (about 90 billion GHc), the highest in the history of Ghana. The result is we have a high national debt of about 200 billion GHc. Functioning with such horrible economic parameters, leaves no other option but to rush the economy within three weeks to Intensive Care Unit.
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