The Member of Parliament for Bolgantaga Central Constituency, and Ranking Member of Parliament’s Committee on Finance, Honorable Isaac Adongo has accused the Vice President, Dr Mahamudu Bawumia as the one responsible for the mismanagement of Ghana’s economy.
The Ranking Member of Parliament’s Committee on Finance, speaking at the Coalition for Restoration Dialogue Series held at the University of Professional Studies, strongly criticized the Vice President for attributing the country’s economic challenges to external shocks such as the Russia-Ukraine war and the COVID-19 pandemic.
“You will recall Alhaji’s famous quote in 2015 ‘How can external shocks jump over Ivory Coast, Togo and Benin and only hit Ghana’. Today, I want to ask Alhaji how come COVID-19 and Russia Ukraine War jumped over Tanzania, Kenya, Uganda, Ivory Coast, Benin and Togo and only attacked Ghana and are still being used as an excuse for economic mismanagement 4 years after COVID ended’? COVID-19 and Russia Ukraine”
Isaac Adongo, MP Bolgantanga Central
The Member of Parliament for Bolgatanga Central, Honorable Isaac Adongo highlighted some key findings from an International Monetary Fund (IMF) report to debunk the narrative that implies that external factors alone are responsible for Ghana’s economic downturn.
Mr Adongo strongly posited during his speech that, the IMF’s staff appraisal report pointed to a combination of external shocks and pre-existing fiscal and debt vulnerabilities as the root causes of Ghana’s economic crisis.
According to him, the International Monetary Fund appraisal report identified several fundamental issues plaguing the Ghanaian economy which include, weak budget implementation and fiscal imprudence, monetary financing challenges, poor fiscal consolidation objectives, and accumulation of arrears and payables among others.
Details Of IMF Appraisal Report
Speaking on the issues of weak budget implementation and fiscal imprudence on the part of the current administration, the Bolgatanga Central legislator argued that the IMF report cited weak budget implementation, spending rigidities, inadequate expenditure controls, a low tax base, and weaknesses in State-Owned Enterprise (SOE) management as contributors to large deficits and rising debt, leading to a loss of investor confidence in the country.
Furthermore, Honorable Isaac Adongo stated that according to the IMF the government’s large monetary financing, despite efforts by the Bank of Ghana to raise policy rates and reserve requirements, rendered monetary policy ineffective.
He noted that the rise of inflation to 54 percent in December 2022, reflected the consequences of the uncontrolled monetary practices by the current administration.
The Honorable Isaac Addongo also indicated that the IMF report pointed to a weak commitment to achieving fiscal consolidation objectives, with overly optimistic targets, poor enforcement of spending cuts, and extra-budgetary commitments leading to an overall fiscal deficit of 11 percent of GDP.
Touching on the accumulation of debt arrears and payables, Mr Adongo stated that according to the IMF the government’s accumulation of arrears and payables, amounting to GHs44.5 billion, was what led to weak expenditure commitment controls and insufficient budgetary allocations, particularly in covering the energy sector shortfall.
Moreover, the Honorable Isaac Adongo stated that the IMF report declared Ghana in debt distress, emphasizing that debt was assessed as unsustainable. He noted that such condition was primarily due to the lack of consideration for contingent liabilities and off-budget borrowing activities which contributed to the failure to detect signs of debt distress earlier.
The Honorable Isaac Adongo further highlighted that the IMF report criticized Ghana’s poor budget credibility and transparency since 2017, highlighting non-budget fiscal operations that obscured the true extent of deficits and debt.
The Member of Parliament for Bolgatanga Central thus chastised the Vice President, Dr Mahamudu Bawumia for failing to manage the economy effectively despite having a team of technical economic advisors.
He also criticized the Vice President, Dr Mahamudu Bawumia over what he described as the Vice President’s attempt to blame the woes of the country’s economy on external factors while neglecting internal fiscal and debt vulnerabilities that were both caused by the mismanagement of the country’s economy by the current administration.
The Ranking Member of the Parliament’s Committee on Finance thus urged the Vice President to re-orient himself in a course related to leadership and collective responsibility, questioning the Vice President’s decision to selectively claim successes while distancing himself from poor performance under the current administration.
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