General News of Thursday, 22 September 2016
The governing NDC says there is nothing phenomenal about the New Patriotic Party (NPP) economic record because it was shielded from economic difficulties through its decision to go to the International Monetary Fund (IMF).
At the “Setting the records straight” press conference broadcasted on Joy FM, Transport Minister, Fifi Kwetey said the National Democratic Congress (NDC) has had to face economic difficulties unseen under the NPP government.
Picking out an example, he said the government has a GH¢10.5bn annual wage bill compared to GH¢2.5billion under the 2001 to 2008 NPP administration led by President J.A. Kufuor.
The forum comes two weeks after NPP Vice-Presidential candidate Dr Mahamudu Bawumia addressed a lecture during which he castigated government for its excessive borrowing, overpricing of contracts and corruption.
He branded the Mahama-led government as incompetent.
Although response has been much-awaited, the team of government officials forming the Setting the Records Straight’ forum maintained that the press conference was not in response to Dr Bawumia or the NPP.
Deputy Education Minister Samuel Okudzeto Ablakwa said it was a routine program the party organises in an election year and part of their political programmes.
Fifi Kwetey noted that if the economy was stable under the NPP is was because President Kufuor applied for special assistance from the IMF and the World Bank.
In what was known as the Heavily Indebted Poor Countries (HIPC) initiative, the NPP government was spared the responsibility of servicing debts which were written off by the IMF and the World Bank, he said.
Ghana’s debt at the time of joining HIPC had medium term debt of $399.7 million and a short-term debt of $150.0 million.
HIPC provided debt relief and low-interest loans to cancel or reduce external debt repayments to sustainable levels, meaning countries could repay debts in a timely fashion in the future.
Ghana received about $3.7bn in debt relief between 2001 to 2004.
According to Mr Kwetey, this decision shielded the NPP government from experiencing currency instability because dollars were injected into the economy leading to currency stability.
The government also got some breathing space as it was no longer required to meet some debt servicing obligations, Fifi Kwetey noted. Government is having to manage an external debt of 57.8 billion cedis by December, 2015, representing 43.3% GDP.
“NPP boast alot about having recorded a long period of currency stability. The truth however was that the period of that stability was mainly during the period when the NPP was not servicing external debts because of the debt-forgiveness dispensation under HIPC.
“Virtually all developing countries that had the same dispensation enjoyed currency stability as well. So it was nothing exceptional on the part of the NPP in terms of currency stability.It was no special competence”, he explained.
But after the HIPC program was completed by the end of President Kufuor’s first term in office in 2004, Ghanaians got a rude awakening to the NPP’s “incompetence”, he asserted.
“As soon as NPP exited HIPC and faces its first main obstacle, the real incompetence was massively exposed…they lost control over the cedi”, he said.
The cedi also depreciated by about 20% in 2008 and by the time the NPP lost the 2008 election. He said the 20% currency depreciation could have been worse had the NPP government not sold Ghana Telecom to Vodafone.
“Out of their desperation, they had to sell Ghana Telecom in order to stem the crisis…it must be remembered that in the eight years of the NDC administration, we have never had to resort to the sale of any national asset simply to stay afloat”, he charged.
Ghana had a “shocking” foreign reserve of $1.8billion by the time President Kufuor left office, the minister went on. The NDC has a foreign reserve of $5.4bn under the “competent” leadership of the Mahama administration.
Mr Kwetey noted that the economy hit a budget deficit of 15% in 2008, the highest since 1993.
He said an average comparison of the NPP’s eight-year record shows that non-oil GDP is 5.6%. If the NDC is to add its 2016 projection of growth then the average growth under the last 8 years of NDC would be 6.3% which is superior to the NPP’s record.
According to Fifi Kwetey, there is now “huge confidence” and “positive expectation” in the economy managed by the NDC. Fiscal deficit in increasing more under control and even credit-rating bodies are about to release a favourable rating of Ghana’s economy.
“Inflation looks set to trend downwards on a sustainable basis” he said.
He berated the NPP for failing to build a single railway line although it set up a ministry to develop and diversify Ghana’s transport system.
He wondered how the Presidential candidate of the NPP Nana Akufo-Addo after about 12 years in parliament and nearly eight years as a cabinet Minister failed to provide potable water to his constituents in Abuakwa in the Eastern region.
Under the NDC administration, Akufo-Addo’s Constituency can now enjoy portable water, he indicated.