Minister of Finance, Mr Seth Tekper says the New Patriotic Party’s assessment of the state of Ghana’s economy, is full of factual flaws.
According to Mr. Tekper, the country’s nominal GDP has moved from GH¢35 billion to nearly GH¢ 80 billion, indicating that debt situation is not as stark as the NPP sought to put it.
The Finance Minister was reacting to comments made by Dr Anthony Akoto-Osei, a former Finance Minister in the John Agyekum Kufuor administration on the Super Morning Show of Joy FM, Wednesday July 10.
Describing the economy as “choked” Dr Anthony Akoto-Osei said apart from the just released NPP statement on the economy, the newspapers are rife with reports about government owing several institutions.
He referred to a news report which said government’s failure to pay some GH¢700 million owed Bulk Distribution Companies (BDCs) since 2012, has posed a serious threat to the existence of the companies and commercial banks that extended credit facilities to the companies.
Also, the NPP noted in it’s assessment of the economy that, apart from the $3billion Chinese loan or the $1 billion Eurobond money government is seeking to raise, the country’s debt stock has risen from GH¢9.5 billion to GH¢38.5 billion within four years.
But Mr Terkpeh refuted this assertion. He said the discussion on the country’s debt should revolve around current GDP figures. According to him, the country’s nominal GDP has moved from GH¢35 billion to nearly GH¢80 billion, indicating that the debt situation is not as bad as the NPP sought to put it.
“When you express the current debt over the higher GDP [nearly GH¢80 billion], and the fact that we have to invest in oil and gas and other infrastructure, which could be self-financing, then this is the context in which we are saying part of the debt will be self sustaining”, he explained.
Mr Terkpeh also said statements purporting that the current administration has always pointed to a single digit inflation as its most significant achievement is “false”, noting that since 1983 Ghana’s inflation has never fallen below 10%.
“The last time we had a tax-GDP ratio [or inflation] below 10% was in 1970, and since 1983 when the economic recovery programme was launched, our tax-GDP ratio has not fallen below 10%; and this is a matter of fact”, he said.
According Dr. Akoto-Osei, the consequence of the decline in both domestic and foreign inflows into the economy is that the country’s deficit (excess of expenditure over income) in the first quarter has escalated out of target by 28%.
Mr Akoto-Osei also indicated that the economy is burdened with over expenditure under the current government.
But Mr Tekper again claimed this is incorrect. “If you have expenditure above income then it is over expenditure but I do not know the last time Ghana had a surplus [income exceeding expenditure]…[Because] if your current income is above your expenditure then you have a surplus”, said Terper.
He said government’s admission of over expenditure has only been with respect to what was provided in the 2013 budget for areas such as wages, subsidies, corporate income tax among others.