Former President John Dramani Mahama has taken a swipe at the Akufo-Addo administration.
He said the current leadership has refused to exhibit contrition and sobriety amid the gloomy economy economic outlook.
Reacting to Vice President Dr. Bawumia’s accusation that the NDC is to blame for Ghana’s worsening debt situation and the subsequent International Monetary Fund (IMF) support request, the former President said though economic hardships persist, all government does is go about putting up “ridiculous and comical” public displays.
He said no amount of buck-passing can wipe away the “irrefutable fact that our present economic situation stems from reckless election-related expenditure, mismanagement, ineptitude, and lack of proper leadership.”
“The highest form of irresponsibility is to shift responsibility to others, and irresponsible leaders are simply not worth the mandate of the people. I have recently dispelled, based on facts and figures, the false attributions made for our economic problems, but it bears repeating that none of the tall lists of excuses he made for where we are is acceptable.”
“All our neighbours were also affected by COVID-19 and exist in the same world in which the Russian-Ukrainian conflict is raging. Almost none of them have anywhere near 30% inflation, double-digit deficits, the kind of debt we have, or a debt to GDP ratio of around 90%. None of them has a higher risk of debt default than we do,” he further argued.
Mr. Mahama said, “the often-cited GHS 25 billion used in the financial sector clean-up are self-inflicted and the result of reckless, politically motivated decision-making.”
He said the problems the banks and financial institutions had could have been resolved with a third of that amount and would have been recoverable in good time.
On Dr. Bawumia’s claims about the excess capacity payment driving Ghana’s debt situation, Mr. Mahama said “the monies paid to the IPPs, which is deceptively couched as payment for “excess capacity” are in fact subsidies paid for power that has been generated and supplied to consumers.”
“We had done sufficient work before our exit in 2016, to address the financial bottlenecks in the energy sector. One of the outcomes of this work is ESLA, which to date has given this government about GHS 23 billion. This should be enough to substantially ease the financial problems of the sector. The now legendary mismanagement of this government has however ensured, that despite collecting all this money, IPPs are currently owed over $800 million equivalent to about GHS 6 billion.”
The former President insisted that the country is in its current state because of some “unwise” decisions government has made.
Mr. John Mahama said the decision to run to the IMF, for instance, was taken at a time when the economy had already suffered substantial damage.
“After a lengthy period of living in denial and plunging the economy into unprecedented doldrums, government finally decided a few weeks ago to request an IMF programme. Inflation stands at a 19-year high of almost 30% for June and is almost set to rise. Our deficit and revenue targets have so far been badly missed, and we are most likely to post yet another double-digit deficit at the end of this financial year. Our public debt has continued to mount.”
“Latest information indicates that government has up to GHS 40 billion in arrears and contingent liabilities, in addition to the official public debt of about GHS 400 billion. On the back of this, it is believed that our debt to GDP ratio runs into the 90% region. Our ability to meet our debt service obligations remains tenuous, with Ghana ranked as the country with the second-highest likelihood of debt default in the world after El Salvador. It is no secret that our foreign currency reserve position is extremely precarious. This leaves us vulnerable unless there is an urgent injection of additional foreign exchange inflows,” he added.
Mr. Mahama urged President Akufo-Addo to take control of the situation and inject fresh, reflective, and dynamic thinking into the management of the economy.