The Minority in Parliament has cautioned the government against plunging the country further into debt.
They explained that if the current rate of government borrowing did not stop, the country risked an economic downturn worse than Greece's.
Addressing a press conference in Accra yesterday, the Minority Spokesperson on Finance, Dr Anthony Akoto Osei, said the country was getting too steeped into borrowing, adding that any country which borrowed too much money had lost control over its financial matters and also its destiny.
"Ghana is losing control over its destiny and the nation must wake up," he said.
The press conference was to react to the 2015 mid-year budget review presented by the Minister of Finance, Mr Seth Terkper.
Macroeconomic performance in 2014
Flanked by the Minority Leader, Mr Osei Kyei-Mensah-Bonsu, and a member of the Finance Team of the New Patriotic Party (NPP) in Parliament, Prof. George Gyan-Baffuor, Dr Osei said the National Democratic Congress (NDC) government had saddled the country with a shrinking economy, lack of jobs, rising cost of living, ballooning debt, total lack of confidence in the economy and a fast depreciating currency.
He said from Mr Terkper's presentation, economic performance in 2014 was worse than the nation had been led to believe previously.
"Provisional GDP growth was four per cent, as against a target of 7.1 per cent. The agricultural sector grew by 4.6 per cent, against a target of 5.2 per cent; the industrial sector grew by an abysmal 0.8 per cent, against a target of 6.8 per cent, with the services sector growing by only 5.6 per cent, against a target of 7.2 per cent.
“Inflation ended the year at 17 per cent, against a target of 13 per cent, making mockery of the government’s single digit inflation propaganda. Worse still, the current account balance had a deficit of 9.2 per cent of GDP in 2014, not to talk about the budget deficit of 10.2 per cent of GDP, against a target of 8.8 per cent. Last but not least, the cumulative depreciation of the cedi for 2014 was 31. 2 per cent, compared with 14.5 per cent in 2013," he added.
In short, he said, the macroeconomic targets set in 2014 were all missed, leading to a decline in the economic circumstances of Ghanaians and wondered how that could drive a transformational agenda to build a better Ghana for all.
He said the country needed a clear vision to lead the transformation and added that the NPP, when voted into power, would govern with decisive plans and timetables and allocate resources prudently.
"We will develop and implement policies, monitor the results and be prepared to take corrective action to keep a genuine and verifiable transformational agenda on track," he added.
Targets for 2015
Dr Osei said the government needed to get macroeconomic fundamentals back on track by reducing the budget deficit and lowering inflation.
Again, he said, the Bank of Ghana (BoG) delayed in responding to the fast depreciating currency and asked why it did not pump more reserves into the ailing economy.
According to him, inflation was also becoming chronic under President John Mahama, adding that it created uncertainty and difficulty in planning for the future, diminished the purchasing power and was a hidden tax on Ghanaians.
"The government has to abandon the propaganda and fix the ever-rising lending rates and ever-increasing cost of living. Moreover, the BoG's monetary policy actions should be transparent," he added.
The Minority Spokesperson on Finance said job creation was a top priority for all governments because it reduced poverty, but with the low growth targets set by the Mahama administration, creation of employment avenues would be impossible.
"Overall GDP in today's oil economy is projected to grow at a slow 3.5 per cent. Without oil, we are expected to grow at 2.3 per cent, which will be the worst in more than 20 years. This backward trajectory is not surprising. Over the past few years, on the back of the oil find, economic growth has been unsatisfactory," he said.
Debt stock and arrears
Dr Osei said while many Ghanaians had experienced the burden of lost hope, unemployment and erratic power supply, the Mahama administration had expanded its borrowing and spending, its debt and deficit.
"Ghana's debt stock as of the end of May 2015 stood at GHc90 billion, representing 67.53 per cent of GDP. For a government that inherited a debt of GHc9.5 billion in January 2009, that is 850 per cent of what the NDC inherited from the NPP administration. It is on course to increase the debt it inherited by 10-fold by the end of August.
“This government keeps on competing with the private sector for money domestically. The effect of the crowding out of the private sector is the high interest rates that businesses have to pay for accessing credit. How can businesses expand to create jobs for our unemployed youth?" he asked.
According to Dr Osei, at Ghana's current debt, each of the 25 million Ghanaians owed GHc3,600 and added that the debt did not include the $1.5 billion Eurobond transaction recently approved by Parliament.
"These loans and the issuance of the Eurobond will just add to the government debt and, in the process, overburden the Ghanaian taxpayer with more debt servicing," he said.
He added that the GHc157 million owed to the Social Security and National Insurance Trust (SSNIT), the GHc112 million to the Ghana Education Trust Fund (GETFund), the GHc191 million to the District Assemblies Common Fund (DACF), the GHc100 million to the Road Fund, as well as the non-road arrears of GHc202 million, were all proof of the huge debt government owed.
Redesigning of policies
Dr Osei called for the redesigning of policies to support stronger economic growth and reduce the chronic high unemployment.
To have a strong currency, he said, the government must promote real investment in the economy, increase the export base and ensure that the country become a consumer of what was produced locally.
He advised the BoG to be "up and doing", adding that a sound monetary policy was critical for maintaining a strong economy.
"The talk shop on fixing but not managing the energy crisis must end. Businesses deserve reliable energy supply. Government must be serious about tackling corruption. Under President Mahama, the canker continues to eat away the very fabric of our society," Dr Osei added.
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