In a surprising revelation, Honorable John Abu Jinapor, Member of Parliament for the Yapei-Kusawgu Constituency, has asserted that the government’s ambitious 1.1 trillion GDP target is intricately linked to inflation.
The statement has ignited discussions surrounding the economic health of the nation and the implications of such a staggering target.
Jinapor has raised critical questions following budget presentation by the Minister of Finance; the transparency of the “Nkunim” Budget, particularly regarding Ghana’s current debt.
Expressing concern, he noted that the debt figure was conspicuously absent in the budget statement, emphasizing that certain exclusions in the Finance Minister’s speech may be permissible, but not in the budget itself.
The economy’s projected growth to 1.1 trillion, as stated by the Finance Minister, Ken Ofori-Atta, has been met with skepticism from Jinapor. He argued that nominal growth to such a magnitude, a shift from 800 billion to 1 trillion while growing at just 2%, can only be attributed to one fundamental.
”So as it stands, from the speech, I didn’t see the debt figure, that is why I needed the figure. The economy will reach about 1.1 trillion nominally. When you grow the economy nominally, you are growing the economy in real terms very minimally, because he himself says the economy will at 2.1 percent without oil.
“And yet when you look at the mid-year review, the size of the economy was 800 billion. You shift from 800 billion to 1 trillion and you are growing at just 2%, it can only be one fundamental thing that takes that economy there, inflation.”
Abu Jinapor, MP-Yapei-Kusawgu
He further highlighted that nominal growth signifies minimal real-term economic expansion, further stressing that inflation is the driving force behind this apparent surge in the GDP.
Furthermore, Jinapor contended that the touted growth is not job-led, pointing to an increase in unemployment and recent World Bank reports indicating that nearly one million people have fallen into poverty in Ghana. He underscored that a nominal GDP of 1.1 trillion is not as promising as it appears, challenging the government’s celebration of this milestone.
“So this one trillion is nothing to write home about. It is nothing to write home about”, he reiterated.
However, the Finance Minister, in presenting the 2024 budget statement, emphasized the significance of Ghana’s projected GDP crossing the one trillion mark for the first time in its economic history. Ofori-Atta asserted that the economy, under President Akufo-Addo, is expected to reach over One Trillion Cedis in 2025, a substantial increase from the GH¢219.5 billion inherited in 2016. The Finance Minister also highlighted the positive impact on tax revenue and debt ratios to GDP, emphasizing the government’s focus on maintaining the current growth trajectory.
Not Exception To Achieve A Trillion GDP
Meanwhile, Vice President of Imani Africa, Bright Simons, expressed skepticism too, stating that it takes extreme self-confidence and audacity to boast of Ghana’s GDP reaching one trillion cedis.
He sarcastically noted that rapid exchange rate depreciation and high inflation can indeed propel a country’s GDP over the trillion mark, but it takes exceptional audacity to present it as an achievement. Simons pointed out that in 2005, Ghana’s GDP was 97 trillion, adding context to the current celebration.
“Rapid exchange rate depreciation and high inflation will indeed take a country’s GDP quickly over the ‘trillion’ mark for sure. But it takes exceptional chutzpah to mount that as an achievement! (Btw, in 2005, Ghana’s GDP was 97 TRILLION!).”
Bright Simons, Vice president-IMANI Africa
The Finance Minister’s claim of crossing the one trillion GDP mark has been met with mixed reactions, with skepticism from some quarters and cautious optimism from others.
