Vice President Alhaji Mahamudu Bawumia has deflated a seemingly growing feelings of social tension created by the opposition disparaging assessments of the economy, disputing claims of poor indicators and insisting available statistics show the economy is mounting a remarkable turnaround under the Akufo-Addo led administration.
Alhaji Bawumia suggests the administration deserves some commendation for steering one of the strongest economy in the country’s recent history, attributing it to favorable business climate, weighted tax cuts, trade agreements and regulations such as the unprecedented implementations of pro-poor growth oriented policy initiatives.
“Before Nana Akufo-Addo was given the mandate, by Ghanaians, we all knew or saw or felt what was happening in the economy. The data was very clear”, the Veep said, in apparent reference and jab at the way the NDC governed the country in the last eight years.
“You saw a situation of declining economic growth, our real GDP growth had come down to 3.7% by the end of 2016; it was around 9.1% in 2018, so growth was declining and you saw this decline in growth in agricultural, in industry as well. You had a situation of rising unemployment, graduates unemployed association was formed, you had high fiscal deficit, the macroeconomic indicators were moving in wrong direction. High fiscal deficit ending at 9.3% of GDP in 2016, the public debt as a percentage of our GDP was on the rise; it started at 32% in 2008 and it rose all the way to 73% of GDP by 2016.
“We have high integrate rate, accumulating arrears on government obligations. The economy was such that she have government cancels teacher training allowances and canceled nursing training allowances, and NHIS had practically reverted to a cash and carry NHIS, there was also a virtual freeze on hiring in the the public sector, the banking system was also severely weak”, the Vice President laid bared a disturbing portrait of an economy in tatters under the NDC regime.
Dr Bawumia, however, mentioned the country was now witnessing a robust economic turnaround of historic proportion just 19 months the NPP took power.
“When we came into office, many people had difficulty in paying their children school fees to go to senior high school, we had people who could not got to the teacher training because they had canceled the allowance, we had people who could go to the nursing training because they had canceled the allowance; people could not pay the electricity bill that was coming because there were so high, farmers were having difficulty in getting access to fertilizers and of course, the issue of jobs was a major difficulty”.
Inside a huge hall full of academias including directors of education, second cycle students, party supporters, the Vice President in full steam belting out strong economic message, reeling from one fact to another and spicing it up with verifiable global statistics with the gross intent decimate what he called “economic jitters” propaganda about the economy.
He said government has set out to engage in massive tax cuts and abolishments in order to normalize the economy and provide strong fundamentals conducive for businesses, to achieve the president’s “ambitious” Ghana beyond aid goal.
“We abolished the excise duty on petroleum, we abolished the levies imposed on Kayaye by local authorities, we abolished the 1% special import levy, we abolished the 17.5% VAT on selected imported medicines that were not produced locally, abolished the 5% VAT on real estate sales and we abolished the import duty on spare parts, reduced the national electrification scheme levy from 5% to 3%, reduced the public lighting levy from 5% to 2%, reduced the special petroleum tax rate from 17.5% to 15%, whiles trying to make sure that the process of fiscal consolidation of managing our spending and revenue prudently”, he said at the launch of the School Entrepreneurship Initiative (SEI), at the Ghana Senior High School in the Northern Regional capital, Tamale.
Playing up the performance of his young administration, the country’s Head of Economic Management Team, also touted reduction of economic downturns, surge in Non oil GPD, increased agriculture and industry growth, slumped fiscal deficit, best since 2006, downward inflation decline, reduction of monetary policy, and strong global trade position.
According to Bawumia, “economic growth which had declined to 3.7% at the end of 2016, increases to 8.5% in 2017, non oil GDP growth at the first quarter of 2018 compared to 4% in 2017. Agricultural growth has also increased, thanks also in part to the Planting for Food and Jobs, has increased from 3% in 2016 to 4.3% in 2017, and what we are noticing this year is that, for the first time in along while, Ghana this year is going to self sufficient in maize”.
He continued that “Industry growth is increased from a negative 0.5% to 17.7% and the fiscal deficit, which is so critical in the management of the economy has been brought down from 9. 3% in 2016 to 5.9% at the end of 2017, and we are looking to get it even lower to 4.5% in 2018”.
He said inflation figures had also been slashed from 15.4% in 2016 and pulled to stand at 9.9% this year.
Alhaji Bawumia also disclosed a reduction of the interest rate on the 91 day treasury bills, which according to him witnessed a minimal decline from about 16.8% to 13.4%.
“Bank of Ghana has also been reducing its monetary policy rate; a year to year, we have seen a reduction from 25.5% at the end of 2016 to about 17% now. Ghana’s trade position with the rest of the world has also strengthened. Trade account which is recorded a deficit of $1.4b in June 2016 has improved significantly to surplus of $1.1b in June 2017 and “same” surplus in June 2018. Our Gross International Reserves, Foreign Exchange Reserve have increased from $6.2b in Dec. 2016 to $7.4b at the end of June 2018. Ghana’s debt to GDP ratio which increased from 32% in 2008 to 73% in 2016, declined, for the first time since 2017, from 73% at the end of 2016 to 64.4%”, the Vice President asserted.