The Deputy Minister of Finance, also a Member of Parliament for Ejisu in the Ashanti Region, John Kumah has urged Ghanaians to ignore former President John Mahama’s propaganda on the current situation in the country.
According to him, there is no new ideas from Former President John Mahama on the economy, saying, “our economy is in safe hands under President Akufo Addo’s government”.
The former President John Mahama who has recently launched attacks on Saturday raises another concern about the economy under the current Akufo- Addo-led government.
In a post on his official Facebook page, the former President said ” Our debt has ballooned to unsustainable levels- topping 80% of GDP- exposing us to very high risk of debt default”.
According to Mr. Mahama, “Almost all of our tax revenue is used to service our debt and the effect has been the introduction of several new taxes” adding that ” 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”.
However, the Deputy Minister of Finance reacting to Fomer President John Mahama’s claims explained that “It’s difficult to appreciate the former President on the issue of debt and debt management. In the first place, Ghana is not at high risk of debt default and Ghana does not spend all its tax revenue on interest cost”.
Mr. John Kumah said that “Government appreciates the concern on interest burden. To this effect, several measures have been instituted to address the situation. We currently have an active liability management program where Government buys back the most expensive instruments including those contracted by the NDC. In 2021 alone, an amount of GHS4.84 billion of 5 and 3yr bonds have been bought back”.
He said” The zero-coupon bond done as part of the 2021 Eurobond program has saved Government of over USD89.0 million in interest cost. Indeed, the government’s debt management strategy has been one of the best in this difficult global financing times occasioned by COVID-19″.
Mr. John Kumah indicated that “Our Rating Agencies have collaborated our good efforts as they have recently affirmed our ratings and maintained our outlook. Certainly, a country on the verge of debt default will be downgraded. There is no truth to Mr. Mahama’s claims on public debt”.
On the issue that Mr. Mahama claimed “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 to win elections that have plunged us into the current crisis, not necessarily COVID-19”.
The Deputy Finance Minister explains that “It’s difficult to rationalize the notion of the former President on COVID-19. The pandemic is a serious issue and has upended many economies around the world. In Ghana, the Government implemented serious measures to save lives rather than the economy”.
“As a result, our COVID-19 cases are among the lowest in the world albeit with a significant impact on the fiscal position. That said, we are already building back better as seen from Q1 and Q.2 growth numbers”.
He said “Again, if the former President wants to appreciate mismanagement during election years, there is classical evidence before him. The unprecedented spending the last 3months of 2012 and 2016 are there for all who want to know”.
The Deputy Finance Minister said ” Elections related spending are often done through the Good and Service component of the budget”
He analyzed that “From fiscal data provided and published by the Ministry of Finance, we observe the following
•We noticed that in 2012, Good and Services increased by 37% from a budgeted amount of GH¢967.0 million to actual expenditure of GH¢1,322.0 million”
Also “In 2016, which also an election year, Good and Service saw another increase of 51.4% on the revised budget. In nominal terms, good and service increased from a budgeted figure of GH¢2,127.0 million to GH¢3,221.0 million by close of the year” Mr. Kumah pointed.
He explained further that in 2020, however, the goods and service component of expenditure contracted by 11.3% on budget and by 4.6% on the revised budget.
He added that “In nominal terms, the Good and Service budget reduced from the budgeted figure of GH¢8,331 million to an end of year figure of GH¢7,388.0 million”.
The Deputy Minister of Finance underscored that the evidence provided above does not support the former President’s claim, adding that “Indeed, we saw mismanagement of the economy in 2012 and 2016 when the former President was desperate for power”.