A former Deputy Information Minister under the erstwhile John Mahama administration has refuted claims by the government that Covid-19 related expenditure resulted in the increase in the country’s fiscal deficit.
According to Mr Felix Kwakye Ofosu, the country’s high deficit is due to the excessive spending by the government during the just-ended 2020 general elections.
Speaking to PM Express host, Evans Mensah on Monday, he explained that neighbouring countries in the Sub Saharan region such as Benin, Togo and Cote d’Ivoire also engaged in some substantial spending to protect citizens from the virus, however, they did not record such alarming debts as Ghana.
He, therefore, reiterated that reports by the Finance Ministry that Covid-19 is to blame for government’s excessive debt are untrue.
“There has been an effort to blame just Covid-19. That cannot be true. Covid-19 was not just an epidemic, it did not just happen in Ghana. It happened globally. So you are able to see by comparing Ghana to our peers to know if we did anything extraordinary.
“We have a list of 22 comparatives who have similar economic characteristics as ours who were also impacted by Covid-19. Ghana has 836 deaths out of 1400 cases. Cote d’Ivoire has about 330 deaths, Togo has 153 deaths, Burkina Faso has 169 deaths, Benin, 108, Nigeria because of the size, they have 1,600. Their population is almost six times our population. Rwanda has about 821 deaths almost similar to ours.
“So it means that there is no humanitarian catastrophe there. What it means is that their governments did the same thing that ours did to protect us but the difference between us and them is our government went beyond Covid-19 relief to spend so they could win the election. So it was election-related expenditure, not Covid-19 relief,” he stated.
Mr. Kwakye Ofosu further noted that the country’s dire economic situation which was started by the Akufo-Addo-led administration began before the emergence of the pandemic.
The debt level he said grew from 56 per cent in 2016 to 63 per cent by the end of 2021. He also projected that the debt level would cross the 80 per cent threshold per data from the International Monetary Fund (IMF).
Currently, data obtained from the Bank of Ghana (BoG) by JoyNews reveals that the country’s public debt stock in 2020, stood at GH¢291.63. In March 2021, the debt stock, however, increased to GH¢304.6.
The debt-to-GDP ratio, 76.10 per cent, recorded in 2020 has risen to 77.10 per cent by June 2021.
But according to Deputy Finance Minister, John Kumah, this is as a result of the coronavirus pandemic that swept through the world in 2020.
“It’s true we have gone back to high debt levels because Covid came and when Covid came it was a matter of everybody trying to keep their people safe. If you check in the first quarter of this year the economy has already grown 3.1% and it is looking positive.
“Check the record from 2017, the Akufo-Addo government posted positive primary balances. It is only in 2020 when Covid came that we posted the negative primary balance which everybody understands that Covid is an exceptional outlier situation,” he told Ernest Kojo Manu on Top Story.
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