Mahama saw the global financial crisis coming and acted immediately; Akufo-Addo, on the other hand, failed to see Covid and is now struggling – Terkper

According to a former Finance Minister, Seth Terkper, the Mahama administration also faced crises such as the global financial crisis, a gas shortfall from Nigeria, a single spine, and a drop in commodities prices.

He did say, however, that the administration foresaw the problems and took swift action to address them, including the discovery of three new oil fields and the elimination of the Petroleum Revenue Management Act’s buffers.

According to him, the Akufo-Addo administration failed to predict the Covid-19 problem and hence unable to deal with the economic consequences.

“To lessen the impact of the global financial crisis, a shortage of gas supply from Nigeria, a single spine, and a drop in commodity prices (2014) is to explain why, with three oil fields, we stopped PRMA buffers, failed to anticipate COVID-19, and struggle to manage the crisis with about $6 billion,” Mr Terkper tweeted in response to the Vice President’s public address on Thursday, April 7.

The rising public debt, according to Dr Bawumia, is due to the Covid expenditure, the banking sector clean-up activity, and the payment of excess power in the energy sector as a result of contracts signed by the National Democratic Congress (NDC) administration.

Regarding the Covid spending, he stated that the government needed to save the lives of the people hence the decision to prioritise spending in the health sector in order to restore the health of the people.

He said spending in all these areas cost the government ¢50.1billion.

But for the banking sector and the Excess Energy payment, he said the debt would be hovering around 68 per cent instead of the 81 per cent.

“Between 2019 and 2021 Ghana’s debt to GDP increased by 17.6 percentage points of GDP. It should be noted that without the 15.1 billion of the exceptional items – the financial sector and then the energy and Covid Ghana’s debt to GDP would have been about 68 per cent instead of the current 80 per cent,” he said.

Dr Bawumia further attributed the current hardships in the Ghanaian economy to the ongoing geopolitical tension between Russia and Ukraine.

He stated that Russia accounts for some 30 per cent of Ghana’s imported grains , 50 per cent of flour and 39 per cent of fertilizer.

The warfare therefore affected the local economy, he said.

“The increase in commodity prices has been exacerbated by the Russia-Ukraine conflict. Russia and Ukraine together account for 30 per cent of the global wheat export. The longer the conflict the greater will be the disruptions to global food supply. The country is also likely to slow global growth.

“According to the AfDB the price of wheat has shot up by 62 per cent since the war begun. The price of fertilizer is up by 300 per cent, the price of maize is up by 36 per cent since the war begin . Here in Ghana 60 per cent of our total imports of iron ore and steel are from Ukraine.

“Russia accounts for some 30 per cent of Ghana’s imported grains, 50 per cent of flour and 39 per cent of fertilizer . So we are directly affected by the Russia-Ukraine ware. Unfortunately, we do not know when it will be over. The global increase in fuel prices is causing hardship.”

He further said he recognizes that the country is going through some challenges at the moment.

He however indicated that some measures have been introduced by the government to ameliorate the hardship the people are going through.

He said “from the man on the streets to the business mogul, the health of the economy is the foundational instrument.

“The economy is what we feel in our pockets. I acknowledge that we are going through difficult times, this is the reality. Our economy is experiencing rising prices of fuel and virtually all commodities. Prices are on the rise.”

“These have come at a surprise to many Ghanaians and many questions have been asked about the state of the economy.