{"id":734145,"date":"2019-10-30T11:45:23","date_gmt":"2019-10-30T11:45:23","guid":{"rendered":"https:\/\/ghana-mma.com\/2019\/10\/30\/i-made-economy-good-mahama\/"},"modified":"2019-10-30T11:45:23","modified_gmt":"2019-10-30T11:45:23","slug":"i-made-economy-good-mahama","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2019\/10\/30\/i-made-economy-good-mahama\/","title":{"rendered":"I Made Economy Good – Mahama"},"content":{"rendered":"

<\/p>\n

\n

John Dramani Mahama<\/strong><\/p>\n

Former President John Dramani Mahama is taking credit for Ghana\u2019s rapid economic growth after running same aground before he was booted out of power by the electorate in 2016.<\/p>\n

He is going about saying it was through his performance that Ghana has been ranked one of the fastest-growing economies in the world currently and not due to the efforts of President Akufo-Addo and his economic management team.<\/p>\n

Addressing opposition National Democratic Congress (NDC) supporters in London, England, on a recent visit, the former President who is leading the NDC for the 2020 presidential election said \u201cwhatever is responsible for the growth, the growth is only in the oil sector.\u201d<\/p>\n

Oil Sector<\/strong><\/p>\n

He said, \u201cAll that growth, fastest-growing economy in the world, it\u2019s the oil sector and where are those revenues coming from? They are from the TEN field and the Sankofa field that we worked on in our time.\u201d<\/p>\n

He claimed that in 2016 when economists were saying Ghana\u2019s financial situation could be likened to someone in intensive care, he predicted that the country was going to be one of the fastest-growing economies.<\/p>\n

\u201cAnd that made me, in 2016, say that Ghana was going to be the fastest-growing economy in the world and that we are going to grow above eight per cent. I predicted it before they came into office,\u201d Mr. Mahama said without supporting his claims with any figures.<\/p>\n

\u201cAnd, so, you (Akufo-Addo government) come into office \u2013 we were receiving less than a billion cedis in revenue from oil \u2013 and because of TEN and Sankofa, you\u2019re receiving almost GH\u00a24 billion in revenue; four times what we got. And then we introduced ESLA and you were so much against ESLA and said when you come, you\u2019ll repeal it; ESLA is bringing GH\u00a23 billion more revenue than what we got.<\/p>\n

\u201cAnd, so, you\u2019re seeing growth based on those revenues; you didn\u2019t introduce them, you\u2019re just the beneficiary of the hard work that the previous government did. And yet that\u2019s what they are trumpeting: the fastest-growing economy. It cannot be by accident. Yes, it is not by accident because we worked just to make it happen,\u201d the former President told his audience.<\/p>\n

Key Assessment<\/strong><\/p>\n

The former President\u2019s comments were coming on the heels of a recent assessment made by the Chief Economist for Africa at the World Bank, Dr. Albert Zeufack, in Washington, DC, United States.<\/p>\n

The World Bank boss had said, \u201cAfrica still hosts four of the fastest-growing economies in the world. Countries such as Ethiopia, Rwanda, Ghana and Cote d\u2019Ivoire are still growing above seven per cent. These countries are not only the growth champions on the continent but also among the fastest-growing economies in the world.\u201d<\/p>\n

Ex-President Mahama\u2019s wild claim is likely to trigger heated political debate because he stands accused of supervising a very weak economy that brought untold hardships to the people.<\/p>\n

ISSER Indictment<\/strong><\/p>\n

In 2016, when he was gearing up for a second term that was not to be, the Institute of Statistical, Social and Economic Research (ISSER) of the University of Ghana, Legon, released a report indicting his NDC government for its handling of the economy.<\/p>\n

\u201cGhana\u2019s GDP growth rate of 3.7% in 2016 was certainly a far cry from the record high of 14.0% in 2011, and the lowest in over two decades.The 2016 growth outcome was a continuation of the downward trend since 2011,\u201d it said.<\/p>\n

Further Decline<\/strong><\/p>\n

\u201cIt represented a further decline from the 2015 rate of 3.9%. Although the 2016 outturn of 3.6% growth was substantially higher than the anaemic rate of 1.4% registered by sub-Saharan Africa (SSA) as a whole in 2016, it fell short of the 4.1% (revised) target,\u201d adding, \u201cMoreover, the country\u2019s overall GDP growth rate was below that of the non-oil sector of 4.6%, a continuation of the underperformance of the oil sector.\u201d<\/p>\n

Current Outlook<\/strong><\/p>\n

The 2016 and 2018 economic indicators show clearly that President Akufo-Addo has outperformed Mr. Mahama when he led in 2016.<\/p>\n

Fiscal Deficit under NDC was 9.3% (6.8% of rebased) but has dropped to 3.8% under Akufo-Addo and his NPP administration, while inflation stood at 15.4% when the NDC was exiting power. It is currently around 9.4%.<\/p>\n

Public Debt<\/strong><\/p>\n

Total public debt stands at GH\u00a2173 billion including the cost of the banking sector clean-up of GH\u00a212billion from GH\u00a2122 billion left behind by Mr. Mahama and his NDC whilst\u00a0 total Public Debt (%GDP) was 56.8% under NDC and currently stands at 54.8% (58% \u2013 including bank bailout).<\/p>\n

Lending Rate under NDC was 32% and now stands at 27% while Cedi Depreciation under NDC was 9.6% but under NPP it is 8.4%.<\/p>\n

Standard and Poor\u2019s (S&P) Global rating put the NDC at B- but due to competent management it has improved to B (March 16, 2019) under NPP.<\/p>\n

Positive Outlook<\/strong><\/p>\n

Last month, the World Bank outlook on Ghana was that \u201ctwo and a half years after being elected president in a peaceful election, President Akufo-Addo has marked some successes implementing some of its promises such as planting for food and jobs and free secondary education,\u201d notwithstanding some challenges.<\/p>\n

It said \u201cGhana\u2019s economy continued to expand in 2019 as the first quarter gross domestic product (GDP) growth was estimated at 6.7%, compared with 5.4% in the same period of last year. Non-oil growth was also strong at 6.0%. The relatively high quarterly growth was driven by a strong recovery in the services sector which grew by 7.2% compared with 1.2% in 2018.\u201d<\/p>\n

Fiscal Consolidation<\/strong><\/p>\n

\u201cThe government continued with its fiscal consolidation efforts in 2019 even though there were still challenges in meeting the revenue targets. Fiscal performance for the first half of 2019 showed an overall budget deficit (on cash basis) of 3.3% of GDP higher than the target of 2.9% of GDP. This is because the revenue shortfalls of 1.6% of GDP were higher than expenditure cuts of 1% of GDP.\u201d<\/p>\n

Private sector credit grew stronger, supported largely by the well capitalized banking sector. Inflation continued to be in single digits in the first six months of 2019, gradually rising from 9% in January to 9.5% in April 2019 but reduced to 9.1% in June 2019 mainly driven by low food inflation.<\/p>\n

GDP Surplus<\/strong><\/p>\n

Ghana\u2019s current account in the first half of 2019 was estimated at a surplus of 0.1% of GDP supported by favourable trade conditions of Ghana\u2019s three main export commodities\u2014oil, gold and cocoa, resulting in a trade surplus of 2.8% of GDP. The current account surplus, combined with significant inflows to the capital and financial accounts, resulted in an overall balance of payments surplus equivalent to 1.9% of GDP. With the issuance of the $3 billion Eurobond in March 2019, the international reserves significantly improved in 2019 with Gross International Reserves (GIR) of $8.6 billion (equivalent to 4.3 months of import cover) at the end of June 2019.\u201d<\/p>\n

Cedi Pressure<\/strong><\/p>\n

The Ghana cedi came under considerable pressure in the first quarter of 2019 due to high demand, as importers sought to restock their supplies but, in the second quarter, the domestic currency market became relatively calmer. The Ghana cedi cumulatively depreciated by 8.2% in the year to July 18, 2019.<\/p>\n

The World Bank predicts economic growth to increase to 7.6% in 2019. Non-oil growth is expected to accelerate to 6% as the government\u2019s new policies in the agricultural sector and the promotion of agribusiness begin to take effect. Inflation is expected to remain within the central bank\u2019s target range of 6-10% over the medium term.<\/p>\n

The pace of fiscal consolidation is expected to slow in 2019 and the overall fiscal deficit is projected at 4.5% of GDP in 2019 and, in the medium term, it will remain within fiscal rule ceiling of 5% of GDP.<\/p>\n

By A.R. Gomda<\/strong><\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

John Dramani Mahama Former President John Dramani Mahama is taking credit for Ghana\u2019s rapid economic growth after running same aground before he was booted out of power by the electorate in 2016. 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