Finance Minister, Ken Ofori-Atta has revealed that Ghana’s economy grew by 7% on average between 2017 and 2019. According to him, this is the highest and sustained growth period in the history of the country.
Meanwhile, he attributed the strong growth to the Government’s prudent management of the economy and implementation of its flagship programs.
“After four years of implementing these prudent measures, the Ghanaian economy witnessed a turnaround. As a result, you saw single-digit inflation of 7.9 percent, reduced fiscal deficits with three consecutive years of primary surpluses”.
However, he lamented that the pandemic has reversed this strong growth recorded over the past four years. This is reflected in the marginal growth of the economy in 2020. The impact of the pandemic, according to him is “the reduction in growth from an average of 7% (2017-2019) to 0.4% in 2020”.
Also, Mr. Ofori-Atta indicated that during this period, there was a relatively stable exchange rate. There was also a significant improvement in the current account with three successive years of trade surpluses. Besides, he pointed out that there were strong foreign exchange reserve buffers covering 4 months of import cover. Above all, the country witnessed relatively low and sustained interest rates of about 13 percent during this period.
Furthermore, he highlighted the impact of the government’s policies on the economy even in the face of the pandemic. Thus, he believes that without the policies, the economic impact of the pandemic on Ghana would have been worst.
“…the economy continued to remain resilient in 2020, even at the height of the COVID-19 pandemic”.
Meanwhile, Mr. Ofori-Atta said, “for the first time in our 64 years of nationhood, a Ghanaian Government had to tackle a severe health crisis and its attendant economic crisis”. He outlined some of the effects of the pandemic on the Ghanaian economy. According to him, the partial lockdown resulted in “loss of jobs, incomes, the collapse of businesses and loss of Government revenues”.
Undoubtedly, Mr. Ofori-Atta indicated that the measures the government took to protect Ghanaians came at a cost. This cost, according to him, is “the sudden relapse in the debt situation from 62.4% (2019) – 76.1% (2020)”.
Meanwhile, the Minister seems not to be so much worried about the country’s debt as he cited some other countries battling similar situations. For instance, he indicated that South Africa’s debt stock rose from 62.2% in 2019 to 82.6% in 2020. Likewise, he pointed out that Zambia’s debt rose from 91.9% in 2019 to 119.97% in 2020.
Moreover, to paint a better picture that the rising debt is not limited to developing economies, he cited some developed economies as well. For example, he stated that the UK’s debt stock rose from 85.4% in 2019 to 100.9% in 2020.
Also, he indicated that the rate of growth of the public debt has been lower under this government than in previous administrations. This, he noted, is “despite the impact of the pandemic”. This notwithstanding, Mr. Ofori-Atta assured Ghanaians that the government is taking measures to limit the growth of the country’s debt stock. 7% 7% 7% 7%