COVID-19 has become convenient whipping boy cited as reason for the crisis we face – John Mahama

The former President and Flagbearer for the the 2020 Presidential Election has described the current economic woes of Ghana as the handiwork work of the Akufo-Addo/Bawumia government.

Former President Mahama on Monday, September 6, in his speech at a forum organized by the opposition group attributed the economic mess to the reckless borrowing and mismanagement of the economy by Akufo-Addo government.

”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 in order to win elections that have plunged us into the current crisis, not necessarily COVID-19” he said.

According to Former President Mahama, ”a comparison with our neighbours and peers in Sub-Saharan Africa, shows they have been able to protect their citizens from COVID-19 in ways that are similar to ours. They have however avoided increasing their debts and deficits because of more prudent
management of their economies”.

Mr John Mahama expressed resentment as to how the Akufo-Addo government, having inherited a bouyant economic prospects from the Mahama administration could land the country into a state where over 80% of our GDP is used to service for loans that have been borrowed by the Akufo-Addo/Bawumia government.

Kindly read excerpts of his statement below

I am on record to have predicted in November 2016 that, due to the work we had done to overcome the economic headwinds and the coming on stream of two additional oil fields, economic growth will go past 7% in 2017 and beyond.

This was confirmed by the World Bank and IMF, predicting growth above 8% for the same period.

Additional oil revenue, a resolved energy crisis paving way for more and sustainable generation of power
and sound implementation of our home-grown policies were going to make life comfortable for the new government after 2017.

Despite these favourable conditions, most of the gains we made and bequeathed to this government have been eroded and we have been plunged into further economic crisis.

COVID-19 has become the convenient whipping boy and has been cited as the reason for the crisis we face now and the attendant economic hardships. Yes, COVID-19 affected the economy, and no one can dispute that. It is however not the main reason why we are in the current hole we find ourselves. COVID-19 only became a pretext for reckless election related spending, which produced the largest ever budget
deficit in the recent economic history of Ghana last year.

Our debt has ballooned to unsustainable levels- topping 80% of GDP- exposing us to very high risk of debt default. Almost all of our tax revenue is used to service our debt and the effect has been the introduction of several new taxes. 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.

A comparison with our neighbours and peers in Sub-Saharan Africa, all of whom were also affected by
COVID-19, shows they have been able to protect their citizens from COVID-19 in ways that are similar
to ours. They have however avoided increasing their debts and deficits because of more prudent
management of their economies.

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 in order to win elections that have plunged us into the current crisis, not necessarily COVID-19.

This has been the luckiest government under the fourth republic. They have benefitted from 60% of all the oil revenue accruing to Ghana since we began producing oil, they have had more than twice the total tax revenue available to us and have enjoyed unprecedented support from our development
partners.

Within a space of 12 months, they have received up to GHS11 billion from the IMF alone and over $200
million from the World Bank and other donors. They had access to over $200 million from the
Stabilization Fund we set up and got Central Bank Financing of GHS10 billion whereas we had zero
financing from the Central bank in 2016 despite all our challenges.

They have also increased our debt by almost twice the total amount of all previous governments put
together. All of this notwithstanding, they have the least to show in terms of tangible gains or capital
investments.

Another major problem has been the unprecedented levels of corruption and the total lack of
accountability and prudence in the handling of the public purse.