The presidential candidate of the NDC, John Dramani Mahama has stated that his administration had financed the budget from the country’s revenues in 2016.
“We didn’t borrow one Cedi from the central bank, the first time in Ghana’s history. Everything that we finance the budget within 2016, we did zero central bank financing”.
Speaking in an interview on Saturday, November 28, 2020, the former president noted that this extraordinary act of zero central bank financing had put the economy on a better platform for Nana Addo’s administration to continue. He argued that the additional revenues should have helped the NPP to continue fiscal consolidation with growth so that the positive effect would have been felt.
The former president indicated that he left a much better economy for the NPP in 2016. He described the current state of the economy as the worst in the entire history of the 4th republic. He lamented that the NPP has nothing good to show for the foundation he had laid instead of building on the good foundation he laid, the current government chose to abandon everything he had started and chartered a new path.
“And so, yes, the economy is in a bad state. We handed him a much better economy. The World Bank and the IMF have all said that in 2017, the economy was going to grow at 8% because of the work that we had done in 2016. I left him 300 million dollars in the stabilization fund, for a day such as this when corona struck.
“The stabilization fund is used to ameliorate economic shocks and so I left him 300 billion dollars in that fund, I left him 270 million dollars in the sinking fund so that when Kuffour’s Eurobond became due they will be able to pay for it. I left him 270 million in the Ghana Infrastructure Fund, I left him revenues in two new oil fields”.
Mr. Mahama stated that he relied on only one oil field; the jubilee oil field to undertake all the infrastructural development he had undertaken in the country in his four years as president. He noted that even with the one oil field, there was a problem with the FPSOP and so they had to reduce production.
“And so he’s got 3, 4, 5 times more oil revenues in his period than I got. But what is there to show for it, virtually nothing. And look at the figures we are talking about. Debt services and wages are more than 143% of revenue. How could this have happened overnight?”
“Instead they jettisoned everything and decided to go on their track. This finance minister, you know what he’s interested in? All he’s is interested in is going on the bond market to borrow money. Because he benefits from it. Indirectly his company is at the bottom of borrowing all the zero bonds. He borrowed 9 billion dollars in the bond market in four years. And every bond he floats, he makes money out of it through proxies and other things.
“And this is a conflict of interest, the president knows about this. And so yes, we have a broken economy but is time for the person who broke it to leave so that somebody can come and fix it”.
He also accused the finance minister of cooking up figures to paint the economy with a better picture that is far different from the reality
“You see when you have a hole and you are hiding it, eventually, when reality catches up, you will find that that hole will be exposed. The finance minister who is a cousin of the president has been cooking the books since 2017”.
He further noted that the Finance Minister can present deficit numbers, debt to GDP ratio, and all the other statistics that look good but as soon as you add the liabilities you will get the true picture. He cited the financial sector clean-up and the energy sector debtor as some liabilities that have not been properly captured in the budget.
“The energy sector debt, today he owes the private power distributors alone 1.5 billion dollars.
“And so has been engaged in subterfuge and sometimes very criminal subterfuge. In 2019 they didn’t meet the revenue target, and do you know what Ken Ofori-Atta did? He made GRA go and borrow money from commercial banks and presented it and said we meet revenue targets. So when coronavirus struck, the commercial banks have been deducting the loan that they gave to show good figures for 2019 which is why the economy is worse than it is.
“Any revenue that comes, the commercial banks are taking back their monies. And so some of these things have been very criminal and I’m surprised that Prof. Adei as chairman of GRA could connive and do something as criminal as this. The president knows about it and he did nothing about it”.