There is more than meets the eye with regard to the circumstances leading to the GH˘8.7billion budget deficit incurred by the ruling National Democratic Congress (NDC) in the year 2012.
Among several government institutions that were caught in this excessive spending was the office of the President, which overspent its budget by a whopping GH˘600 million (the equivalent of 6 trillion old cedis). This was far in excess of its budgetary allocation for the year under review.
The Minority in Parliament, through its leader and Member of Parliament (MP) for Suame, Osei-Kyei Mensah-Bonsu, who blew the lid off the scandal, asked, “What did the office of the President spend this money on?”
Interestingly, the amount involved was said to have been spent in the last three months of the year 2012 when President John Dramani Mahama took over as ‘Caretaker President’, raising eyebrows over the expenditure, considering the fact that it was an election year where cars were distributed to university students and opinion leaders including chiefs, Imams and pastors.
When he was contacted, Information Minister Mahama Ayariga declined to comment on the issue for the reason that it was contained in the NPP’s supposed ‘true state of the nation’ address.
He however added that the chief director had said the claim could not be possible, and that it was frivolous in the absence of any further details.
In the opinion of the vice presidential candidate of the NPP, Dr Mahamudu Bawumia, the GH˘8.7billion recorded deficit could have provided free secondary education for Ghanaian students for a period of not less than eight years.
Some political analysts therefore suggested the amount could have been part of a larger sum that was spent on electioneering campaign in view of the flamboyant nature of the President’s campaign and its accompanying freebies.
Apart from that, the opposition NPP also sought to know “why the Social Protection Programmes (SPP) spent over GH˘700 million or ˘7 trillion” and how the Ministry of Youth and Sports last year spent well over GH˘300 million above its budget.
What seemed to have surprised the NPP MPs the most was the spending of an amount of GH˘300million (the equivalent of three trillion old cedis) by the National Disaster Management Organisation (NADMO) in the last quarter of 2012.
As a result of this gargantuan fiscal deficit and arrears, the international credit rating agency Fitch is reported to have downgraded Ghana’s credit rating from B+ stable to B negative.
However, instead of dealing with the practical economic challenges ordinary Ghanaians are grappling with, the opposition party said, “Government is busy praising itself for achieving single digit inflation for so long.”
Osei-Kyei Mensah-Bonsu produced an extract from the February 2013 report of Bank of Ghana’s Monetary Policy Committee which indicated that:
The 91-day Treasury bill rate rose from 10.7 percent in December 2011 to 22.4 percent in June 2012, and to 23.1 percent in December 2012.
The 182-day bill increased from 11.1 percent in December 2011 to 22.0 percent in June 2012, and increased to 22.7 percent in December 2012.
The 1-year fixed note went up from 11.3 percent in December 2011 to 22 percent in June and to 22.9 percent in December 2012” to support his claim.
He asked, “How come that at the time inflation is supposedly dropping in single digits, interest rates are more than doubling over a period of just 12 months?
“Which economic theory explains this strange observation, and in which country has this ever happened?” wondering whether it was not mystical for inflation rate to stand at 8.8% while lending rates hover around 30%.
He was therefore not the least surprised that the private sector that had been touted as the engine of growth, could not ignite its engine, wondering, “What kind of economic comedy is this?”
The NPP asked government to, as it were, “abandon this single digit inflation propaganda, stop borrowing unnecessarily and unreasonably from the domestic market, and let interest rates drop so that businesses can borrow and create jobs” since “people need jobs, not propaganda. People want prices on the market to be genuinely stable”.
Facts And Figures
The NPP could also not fathom why the economy has had what it described as ‘so many opportunities’ yet “there has been so little economic growth”.
This, according to the Minority leader, was because the “NDC government inherited an economy that was growing at 8.4% even without the benefits of crude oil export.”
“In 2011, the crude oil discovered under the Kufuor administration came on-stream. So in 2011, economic growth was reported to be 14.4% (the same as the targeted rate of 14.4% which in itself is a rather rare occurrence),” he noted.
Assuming that this reported figure was accepted, the NPP stressed the belief that a large part of this growth (over 40%) could have been associated with crude oil production and export.
The NPP indicated that “any good government would have been concerned about the slowdown in the non-oil sectors of the economy”.
Instead, it said, government was all over the place boasting about ‘unprecedented economic growth’, refusing to acknowledge that almost half of the 14.4% was coming from the export of crude oil that did not result from any effort of government.
“The sad report is that in 2012, our economy grew by only 7.1%, both the oil and non-oil sectors put together,” he emphasized.
In the last three years of the NPP led government, 2006, 2007 and 2008, the economy was said to have grown by 7.6%, 7.5% and 8.4% respectively when commercial production of oil had not commenced.
However, the NPP said, “in 2012 we are growing more slowly than in periods when we did not have crude oil”, insisting that “proceeds from Ghana’s oil export are not being used to grow the economy.”
The NPP stated, “This is a government that has been so lucky to have so much resource at its disposal, and yet all the blessings have been eaten up by economic mismanagement.”
Additionally, it claimed this government had borrowed much more money than all previous governments put together, yet “there is very little to show for the huge debts we are piling up”.
Source: Charles Takyi-Boadu/D-Guide
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