An economy in continued crisis.
Hon Kwaku Kwarteng.
July 22, 2015
The Finance Minister appeared in Parliament on
Tuesday, 21st July 2015 to give the following
review of Ghana’s economy:
1. As of May 2015, Ghana’s total public debt had
hit GH¢90 billion representing 67.5%
of GDP (para 70). This compares with total
public debt of GH¢9.5 billion in January
2009 when the NDC govt took over.
2. Govt has dipped its hands into the Ghana
Stabilisation Fund. The GSF is money set aside
from our petroleum proceeds to stabilize the
economy when things get bad. As of July 2015,
govt had drawn down GH¢206 million from
the GSF (para 68).
3. At the beginning of 2015, govt estimated that
prices of tomato, kenkey, TV sets, transport
fares, etc would be increasing at 11.5%.
Now, govt says price increases would be worse
than that. It would be 13.7% instead (para
73).
4. Real GDP growth measures the expansion
in economic activities in a country. It
therefore measures the creation of jobs in the
economy. At the beginning of the year, govt said
real GDP growth would be 3.9% in 2015.
This was low because in 2008, even without oil,
real GDP growth was 8.4%. Now, govt says
even the 3.9% cannot be achieved, and that we
can do only 3.5% growth, oil included (para
73).
5. Sometimes, govt spends on credit or makes
expenditures for which it has no money.
Expenditures on credit is called deficit. At the
beginning of 2015, govt said it would incur a
deficit of 6.5% of GDP in 2015. Now
govt says, things would be worse than they
thought, and that the deficit would be 7.3%
of GDP (para 73).
6. At the beginning of the year, govt promised
to spend GH¢39.1 billion (excluding
arrears payments) to provide services, including
solving dumsor, for Ghanaians. Now, govt has
slashed this promise by GH¢1.2 billion to
GH¢37.9 billion.
7. Capital expenditures are govt
investments into roads, infrastructure,
electricity supply, etc. Govt has slashed
capital expenditure in 2015 by GH¢600
million.
8. On top of all this, govt says it needs an
additional GH¢866 million before it can
keep the economy afloat (para 94).
9. There are no new interventions on energy
and the dumsor apart from the old
assurances that have kept Ghanaians in darkness
for more than 3 years.
10. Please remember that this govt is the only
govt to benefit from commercial oil money. It is
a govt that has collected more taxes than any
other in the country’s history. it is a govt
that has increased our public debt by a whopping
GH¢80.5 billion. And yet, this is where
we are!
11. Strangely, the Minister claims that his
govt’s economic strategies are on course!
For further clarification, call Hon Kwaku
Kwarteng, 0244 838 735
July 22, 2015
