“10. Total public debt has increased from GHC122 billion in 2016 to GHC214 billion (62.2% 0f GDP) at the end of November 2019 (including the cost of the banking sector clean-up). Excluding the cost of the banking sector clean-up, the debt stock stands at GHC 203 billion (59.16% of GDP) – Table 1 (Figure 3).
11. However, the strong fiscal adjustment and better debt management has meant that the rate of debt accumulation has slowed down considerably to the lowest in the last decade. Between 2008 and 2012, Ghana’s debt stock increased by 267%. Between 2012 and 2016, the increase was 243% but between 2016 and 2019 the increase has been 76% (including the cost of the banking sector clean-up) – Figure 4.
12. Furthermore, the debt to GDP ratio increased by 49% between 2008 and 2012, 19% between 2012 and 2016 and 3.9% between 2016 and 2019 (excluding the cost of the banking sector clean-up or 9.3% including the cost of the banking sector clean-up) – Figure 5. In this regard, the Government of Nana Akufo-Addo has therefore kept its promise of reducing the rate of borrowing.”
“13. Although in absolute terms interest payments have increased over the last two years, with much better debt management, interest payments as a percentage of GDP declined from 6.9% of GDP in 2016 to 5.6% of GDP in 2018, and 5.7% of GDP in 2019, reducing the burden of the debt on the budget. So even though the quantum of the debt has gone up, we are paying less as a percentage of our annual income to service it.”
“4. A combination of prudent monetary policy and fiscal consolidation supported by zero central bank financing of government and strong external sector developments have underpinned a steady disinflation process over the past 36 months. Inflation has dropped steadily from the high of 15.4 percent at the end of 2016 to 7.9 percent at the end of December 2019, about the lowest we have seen since 1992 (Figure 6).
15. Headline inflation, food and non-food inflation, have increasingly converged since 2016, an indication of well-anchored inflationary expectations under NPP economic mnagement. Core or underlying inflation (i.e excluding volatile items such as food and energy) has also steadily declined and is at its lowest since 2012 at 6.4% at the end of 2019 (Figure 7). The decline in non-food inflation is reflected also in the decline in the rate of increase of petroleum prices (Figure 😎 and absolute decline in utility prices (Figure 9). Our government is the first government in the history of the fourth republic and that has reduced electricity prices in absolute terms.”
[08:09, 11/02/2020] +233 24 568 9338: Dr. Bawumia @ KumasiTownhall:
“Ladies and Gentlemen, the challenge was huge. How could an economy that could not pay teacher and nursing training allowances suddenly deliver lower taxes, restore teacher and nursing training allowances, create jobs, implement free senior high school education , NABCO, planting for food and jobs, one village one dam, one constituency one ambulance reduce electricity prices, formalize the economy, industrialize the economy, reduce the cost of doing business, etc. while at the same time reducing the budget deficit and the rate of borrowing? It seemed an impossible task and our opponents were emphatic that we could not fulfill our promises. But we were very confident that with good economic management and by the grace of God, we could make what seemed impossible possible.”
“Lets start at the beginning. The NPP under the leadership of Nana Akufo-Addo was largely aware of the nature of the problems that existed in the economy before we came into office. We had analysed these problems, talked about them and put forward solutions which were largely captured in our 2016 Election Manifesto. Some of the problems that existed in the economy, many of which were worsened following the eight years of NDC government, included:
• Declining Economic growth;
• High Inflation rate
• High Interest rates
• High exchange rate depreciation
• High fiscal deficit
• Rapid accumulation of debt. 12-fold increase in debt
• Weak and collapsing financial system
• High Unemployment
• The NHIS was back to cash and carry.
• Emergency healthcare system was collapsing with only 55 semi-functional ambulances in the country
• Four years of dumsor with its costs
• Average annual increase in electricity prices between 2010 and 2015 was 45%
• Increases in taxes on many items
• Freeze on public sector recruitment
• Cuts in research allowances for lecturers
• Abolition of teachers training allowances
• Abolition of nurses training allowances
• Teachers paid 3 months arrears after working for 2-3 years.
• High Import Duties
• Corrupt practices associated with the acquisition of passports and drivers licenses.
• Problems renewing NHIS membership
• Cumbersome process to clear goods at the ports.
• Many parents could not afford school fees for their children for SHS
• No national ID card
• No working nationwide address system
• Corrupt practices associated with manual court processes
• IMF program was resorted to restore policy credibility with its attendant conditionalities.”
“The growing confidence in the macroeconomy owes a lot to the prudent management of our public finances and monetary affairs over the last three years.
To underpin fiscal discipline going forward, Ghana has for the first time in our history passed into law a Fiscal Responsibility Act that limits the fiscal deficit in any year to a maximum of 5% of GDP and requires a positive primary balance to ensure debt sustainability. In addition, a Fiscal Council has been established to provide oversight and advice on the implementation of fiscal policy.”
The Akufo-Addo Government is the only Government that has achieved a net reduction of electricity tariffs in the 4th republic.Under NDC petrol prices went up more than 24% every year. In the last 3yrs it goes up less than 14% a year. This is data speaking. Data that impacts on the money in your pocket.Dr. Bawumia @ KumasiTownhall:
“Ghana’s external payments position has strengthened. For the first time in over twenty years, the trade balance (the difference between what we export and what we import) recorded a surplus in 2017, a larger surplus in 2018, and an even larger surplus in 2019. It is not because we areimporting less, but largely because of increased exports as a result of positive transformation of this economy by the NPP government. The positive trade balance has resulted in a significant narrowing of the current account deficit as a percent of GDP (figures 12 - 13).”[08:33, 11/02/2020] +233 24 568 9338: Dr. Bawumia@KumasiTownhall:
Ghana operates a managed floating exchange rate regime. For that reason, we can or should never expect that the exchange rate will be fixed. It will not be. It will fluctuate depending on demand and supply. What policy makers can do is to try to control the rate of depreciation or appreciation of a currency through sound policies. In the context of a floating exchange rate regime therefore, arresting the depreciation of a currency can only mean slowing down the rate of depreciation or stopping a rapid and volatile depreciation of the currency.
[08:34, 11/02/2020] +233 24 568 9338: Dr. Bawumi@KumasiTownhall:
“The NDC government and the previous management of the Bank of Ghana had ample time to address impending failures. They were aware of the problems in 2015 in the case of banks and as far back as 2012 in the case of savings and loans and micro finance companies.
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40. In fact, during the 2016 State of the Nation address, the former president stated as follows: “Mr. Speaker, over the past five years there has been a proliferation of microfinance companies. These companies come under the direct supervision of the Bank of Ghana. Unfortunately, lack of effective supervision has resulted in many cases in which microfinance companies licensed by the Bank of Ghana have breached the rules and created supposed pyramid schemes that have eventually come crashing down. One such case is DKM. DKM, with the super high interest rates between 50 and 55% promised, is believed to have caused a loss to its clients in excess of GHC77 million. Many depositors have lost their livelihood.”[08:36, 11/02/2020] +233 24 568 9338: Dr. Bawumia@KumasiTownhall:
“The data shows that Ghana’s macroeconomic fundamentals are strong. Indeed, the strength of Ghana’s fundamentals was confirmed recently by Moodys Ratings which changed Ghana’s sovereign ratings from B3 with a stable outlook to B3 with a positive outlook. This is unprecedented for an election year. Standards and Poors also upgraded Ghana’s sovereign credit rating from B- to B with a stable outlook last year. This was the first upgrade by S&P for Ghana in 10 years! This is a strong affirmation of the positive assessment by the international financial markets of Ghana’s economic fundamentals.”
[08:37, 11/02/2020] +233 24 568 9338: Dr. Bawumia@KumasiTownhall:
“Even in opposition, I alerted the country that on the basis of available data, 8 banks were likely to collapse but they refused to act. Thanks to the Bank of Ghana’s clean-up exercise and the Government’s decision to step in to provide financial support to ensure an orderly exit of the failed institutions, over a million depositors have had access to their deposits already and over 7,000 jobs have been saved as a result of employees taken on by GCB, CBG, or the receivers. Employees whose salaries and employee benefits had been unpaid by the defunct institutions have been paid or are being paid by the receivers. Can you imagine what would have happened in this country if 4.6 million depositors had lost their savings and over 10,000 individuals had lost their jobs?”
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