A Ghanaian economist, Dr Sa-ad Iddrisu has warned that the next administration, to be led by the National Democratic Congress (NDC), could face a severe banking crisis.

Speaking on the AM Show on JoyNews, Dr Iddrisu criticized the outgoing administration’s claims of leaving behind a strong and stable economy. He described the financial sector as weakened, with unresolved issues that threaten to undermine the next government’s ability to manage the economy effectively.

Dr Iddrisu pointed to the failure of the current government to deliver on its promise to establish a GH¢1.5 billion Ghana Financial Stability Fund, which was meant to support struggling banks. According to him, the lack of this fund has left the financial sector vulnerable, with banks recording significant losses under the current administration.

“Banks have made losses amounting to GH¢60 billion, including the Bank of Ghana itself,” Dr Iddrisu stated. “This is not an economy that is doing well. If the financial sector was healthy, such massive losses would not be recorded.”

He explained that the promised stability fund, which was supposed to help stabilize the sector, has not been fully established. So far, the government has only secured a partial commitment of $250 million from the World Bank, which is not fully in there yet.

Dr Iddrisu also highlighted the energy sector as another area of concern. He mentioned that the outgoing administration is leaving behind a $2 billion debt in the energy sector, which is burdening the economy.

“This is just one example. If the economy was truly performing well, we wouldn’t be leaving such massive debts for the next administration to inherit,” he said.

The economist took issue with the government’s focus on GDP growth as a measure of economic success. He argued that while the administration has announced a GDP growth rate of 7% in recent quarters, this figure does not reflect the overall growth of the economy.

“An economy cannot be judged solely by its growth rate. GDP growth does not necessarily mean the population is doing well. Other critical sectors, like energy and banking, tell a different story,” he explained.

He criticized what he described as the government’s narrow focus on growth statistics, stating that a more comprehensive view of the economy reveals significant weaknesses.

Dr Iddrisu warned that without urgent action to address the financial instability, the NDC government will inherit a collapsed banking sector.

“The NDC is likely to face serious banking crises if the stability fund is not established. Handing over a weakened financial sector and massive debts is not the mark of an economy that is doing well,” he concluded.