Former President, Mr John Dramani Mahama has opined that COVID-19 has become the convenient ‘whipping boy’ and has been cited as the reason for the crisis the country is facing now and the attendant economic hardships.
He said although COVID-19 affected the economy, it is however not the main reason why the country is facing its current challenges.
Speaking at the State of the Economy Forum, organised by the NDC proforum on Monday, September 06, 2021, the Former President said, “COVID19 only became a pretext for reckless election related spending, which produced the largest ever budget deficit in the recent economic history of Ghana last year.”
He continued that, “Our debt has ballooned to unsustainable levels- topping 80% of GDP- exposing us to very high risk of debt default. Almost all of our tax revenue is used to service our debt and the effect has been the introduction of several new taxes. This has led to rampant increments in the prices of goods and services. This is primarily responsible for the hardships Ghanaians are going through now. “
Mr John Dramani Mahama said a comparison with other countries in Sub-Saharan Africa, all of whom were also affected by COVID-19, indicated that they were able to protect their citizens from COVID-19 in ways that are similar to that of Ghana.
However, he said they avoided increasing their debts and deficits because of more prudent management of their economies.
“This government must accept that it is their mismanagement of the economy, their thirst for consumption expenditure and the desire to spend beyond our means in order to win elections that have plunged us into the current crisis, not necessarily COVID-19,” he said.
Meanwhile, despite the hardship, the Former President asserted that the NPP-Government has been the luckiest government under the fourth republic.
He explained that, “They have benefitted from 60% of all the oil revenue accruing to Ghana since we began producing oil, they have had more than twice the total tax revenue available to us and have enjoyed unprecedented support from our development partners.”
Mr John Dramani Mahama continued that, “Within a space of 12 months, they have received up to GHC11 billion from the IMF alone and over $200 million from the World Bank and other donors. They had access to over $200 million from the Stabilization Fund we set up and got Central Bank Financing of GHS10 billion whereas we had zero financing from the Central bank in 2016 despite all our challenges.”
He alleged that the government has increased Ghana’s debt by almost twice the total amount all previous governments put together, adding that, “ All of this notwithstanding, they have the least to show in terms of tangible gains or capital investments.”
He said another major problem in the country has been the unprecedented levels of corruption and the total lack of accountability and prudence in the handling of the public purse.
“According to the Auditor General, financial irregularities within the public sector shot up from about GHC700 million in 2016 to GHC12 billion in 2020. This level of leakage will definitely affect the ability of any government to deliver on its mandate and guarantee citizens an appreciable standard of living,” he stated.
Mr John Dramani Mahama said,“ The nonchalance and total unwillingness to address corruption in government is a major worry and will continue to affect our economic fortunes until the trend stops.”