The Minority Leader, Dr. Cassiel Ato Baah Forson, has expressed his concern about the 2023 Budget Statement and Economic Policy of the Government, stating that it has exacerbated the challenges faced by Ghanaians rather than alleviating them.
Addressing the Parliament after the presentation of the Mid-Year Fiscal Policy Review by Finance Minister Mr. Ken Ofori-Atta, Dr. Forson disputed the Finance Minister’s claim that the nation’s economic performance indicated a positive turnaround.
He argued that the available evidence and data indicate a worsening of the country’s problems.
“Mr Speaker, the Finance Minister says the economic performance of the nation shows that we have turned the corner (recovering from the difficult situation. However, the evidence and the numbers before us show that our woes have rather deepened…,” he said.
One of the major issues Dr. Forson highlighted was the declining economic growth rate, which he attributed to the Finance Minister’s decision to borrow heavily from the Treasury Bill Market. The increase in borrowing has contributed to a contraction in the economy.
Dr. Forson emphasized that the continuous borrowing by the Government is a significant factor behind the high inflation rate.
He also pointed out that the Central Bank has been forced to raise Monetary Policy rates due to the rising lending rates caused by the Government’s over-borrowing and over-expenditure.
“The Finance Minister has said to us today that he is reversing economic growth from 2.8 per cent of Gross Domestic Products (GDP) to 1.50 of GDP… This clearly shows that the economy is contracting and declining,” he said.
“Mr Speaker, I say this because he (the Finance Minister) said to us here and now that he had borrowed GHC5.5 billion from January to June from the Treasury Bill Market.”
”Mr Speaker, not long ago, the Minister had informed us that he would not borrow at all in the year 2023… However, the Minister says going into the remaining part of the year he was going to borrow another GHC41.00 billion.”
The Minority Leader expressed concern about the escalating lending rates, with Treasury Bill rates rising from about 14 percent to approximately 23 to 25 percent, with the possibility of further increases in the future.
“Let our Minister not say anywhere that he has turned the corner, he has rather deepened our woes,” he said.
Regarding the stability of the Ghana Cedi, Dr. Forson mentioned that it had only stabilized due to the country’s failure to service its external debts, particularly those owed to Eurobond and countries like China, Saudi Arabia, India, the United Kingdom (UK), Japan, France, and the Czech Republic. However, he warned that the situation could worsen in the future when the country starts servicing these debts in January 2024, leading to potential depreciation of the cedi.
In conclusion, Dr. Forson urged the Finance Minister not to claim that the country has turned the corner economically, as he believes that the 2023 Budget has, in fact, deepened the challenges faced by Ghanaians. He emphasized the negative consequences of continuous borrowing and urged for measures to reduce lending rates and stabilize the currency.
“Looking into the Budget, by this time Ghana should have serviced its external debts, approximately 11 million Ghana Cedis.
“As early as January 2024, we will start serving these debts, and if we are to start servicing these debts, don’t be surprised that our currency, the cedi, will start depreciating once again,” he said.