- insists situation is tight as Akufo-Addo now flies ‘trotro’ airline to Dubai
The World Bank in Ghana, has finally broken its silence on the Ghanaian Economy, indicating that the current situation was very worrying, revealing that President Akufo-Addo and other members of government involved in finance, have been warned about the looming armageddon facing the country.
It added that it will be very tough for the government to avert the current hardship on Ghanaians, and urged it to cut down on its expenditure, in order to make it possible to bring economic stability.
Interestingly, hours after the World Bank’s Country Director to Ghana, Pierre Laporte, said this, President Akufo-Addo, was seen on a commercial flight; Emirate Airlines to Dubai’s ongoing Expo 2020, under the auspices of the Ministry of Energy, a sharp departure from his use of a rented private jet from an European company.
The Luxembourg-based aircraft is registered LX-DIO and operated by Global Jet Luxembourg, said to be costing the Ghanaian taxpayer US$14,000 an hour, with the agent of the aircraft, said to be a staff at the Presidency, the Flagstaff House.
“Is it a really serious situation? Well, the numbers speak for themselves. The situation is very serious. At the World Bank, we’ve not hidden the fact when we’ve held discussions with the government officials and even the head of state – President Akufo-Addo- that Ghana faces a very tough road ahead to restore macro sustainability,” he said.
Pierre Laporte, rubbished claims by the Akufo-Addo government, including Finance Minister, Ken Ofori-Atta that the COVID-19 pandemic is solely to blame for the current economic hardship Ghanaians are going through.
Mr Laporte, argued that long before COVID-19, there were signs Ghana’s economy was heading into trouble due to actions and inactions of the government.
Speaking at the Independence Day lecture at University of Ghana, Legon organised by the One Ghana Movement, on Monday, where former Finance Minister, Prof. Kwesi Botchwey, also spoke, Mr Laporte, insisted that “the situation is very difficult right now. Ghana faces a very tough road ahead to restore macro-sustainability.
“He (the Finance Minister) acknowledges the severity of the situation. Yes, COVID has not helped, but even before COVID, there were signs that the situation was getting a little more challenging,” he is quoted.
The World Bank, disclosed that Ghana’s public debt stock as of now has exceeded the 80percent of Gross Domestic Product (GDP) mark, putting the country in a tighter corner with respect to financing and interest payments.
The Bank of Ghana in its January 2022 Monetary Policy Report, said the stock of public debt was equivalent to 78.4percent of GDP at the end of 2021, compared with 76.1percent of GDP at the end of 2020. In actual fact, the country had borrowed about $344.8 billion as of November, 2021.
“The data as we know is close to 80% of GDP. Probably, now as we speak, it might have exceeded. The fiscal deficit [9.7% in December 2021], unfortunately, with COVID-19 needs to be urgently brought down. Inflation must also be brought down. This is an interesting discussing and we must acknowledge the situation on the ground”, Mr. Laporte said
He further, said the country is in a very challenging situation “as some of the panel have acknowledged that. We call it a crisis. We can describe it in many ways”.
“It’s a really serious situation and at the World Bank, we’ve not hidden the fact. When we discussed it with the Minister [Ken Ofori-Ata] and with all the people in finance and the Head of State [President Akufo-Addo]. The situation is very difficult right now, Ghana faces a very tough road ahead to restore macro sustainability”, Mr. Laporte added.
The World Bank Country Director, emphasised that macroeconomic challenges persisted even the emergence of the COVID-19 pandemic.
“Yes, COVID-19 has not helped but even before COVID-19, there were signs that the situation was getting a little bit challenging”.
“So, the key thing is to be transparent with the people”, he suggested.
“Yes, the figures speak for themselves but not everybody is as educated as we are. Not everyone understands what the numbers mean, so, it is important to talk about it like we are doing”, he noted.
“More important is for us to find solutions for the problem,” he added.
There had been suggestions for the country to seek economic and financial support from the International Monetary Fund but Mr Larporte said “my basic principle, at a starting point your country should not go to the IMF, really truly speaking. Many countries in the world are not with the IMF but are performing well”.
“But the reality is different countries are with the IMF…that is why they were established”, he added.
On his part, Ghana’s longest serving Finance Minister, Prof Botchwey, said that Ghana currently is in crisis and it is about time the government realizes the problem and faces it squarely.
“We are in the crisis…We are unable to pay our bills, we are imposing hardship even on the vulnerable, contractors go unpaid, arrears are piling up and we have borrowed so much money that servicing it is going to create a huge problem, especially for younger generations.
“In any case, you have borrowed so much that we can’t go to that market anymore and even raising the revenue domestically is going to be a problem,” Prof. Botchwey stated.
Prof. Botchwey took on the government, saying it is not living by President Akufo-Addo admonishment that Ghanaians should “be citizens not spectators”.
According to the man who played a very pivotal role in the military regime of the late Flt. Lt. Jerry John Rawlings, the Akufo-Addo government is so intolerant of the views of other people that it will try to hurt any person who dares to criticize it.
Prof Botchwey, an economist and a former law lecturer at the University of Ghana, Legon, accused the government of imposing more hardship on already burdened Ghanaians.
He revealed that he was told not to criticize the Akufo-Addo government because “these people are vindictive, and they’ll come after you if you criticize them, they said. I was quite dismayed and wondered if this was truly reflective of the public sentiment in our time.
“Or whether these friends had perhaps missed His Excellency the President’s exaltation to us in his inaugural address in 2017 to be citizens, not spectators, which exaltation I was sure he meant in earnest,” he said.
The former finance minister, however, said that the government has lost trustworthiness in the eye of multinational organizations because of its actions and inactions, adding that “our policies are no longer seen as credible in the face of the investor community.”
He indicated that the current economic hardships Ghanaians are facing is evident that the government has failed.
“The government is struggling to raise money locally and is accumulating arrears to several programmes; roads, school feeding, LEAP, even salaries … the exchange rate at the forex bureaus is nearing 8 cedis to the dollar. Fuel prices at the filling stations have crossed the GH¢8 per litre bar. Inflation is back in double-digits nearing about 15 percent,” he added.
He suggested it’s about time the government realizes the problem and faces it squarely since the Akufo-Addo government can’t return to the IMF for financial assistance explaining that Ghana has borrowed so much money from IMF, and government’s arrears keep piling up.
He furthered that generating revenue domestically will be a challenge for the government.
“We are in the crisis…We are unable to pay our bills, we are imposing hardship even on the vulnerable, contractors go unpaid, arrears are piling up and we have borrowed so much money that servicing it is going to create a huge problem, especially for younger generations,” he said.
“In any case, you have borrowed so much that we can’t go to that market anymore and even raising the revenue domestically is going to be a problem,” stated Kwesi Botchwey, who served in the government of the Provisional National Defense Council (PNDC) under Rawlings.
