The oxygen any economy could have relied on before COVID-19 struck the country, according to Ghanaian economist Dr. Nii Moi Thompson, was destroyed by Finance Minister Ken Ofori-Atta.
He claims that before the epidemic, important economic sectors of Ghana, including as the financial industry, which is the lifeblood of any country, were not properly established.
“He blames Covid and the Ukraine war for his mess, but the facts say otherwise. Long before Covid, in November 2019, when he presented the 2020 budget to Parliament, he prophesied a steady decline in GDP growth from 7.0% in 2019 to as low as 4.6% in 2022, followed by a weak recovery to 6.5% in 2023.”
“This grim outlook reflected the consequences of his vindictive and ruinous policies since 2017, including the wanton destruction of the financial sector – the source of oxygen for any economy – which shrank by an average of nearly 12% per year, and the very dynamic construction sector, which declined by 6.5% by the end of 2019, fuelling unemployment. Growth in other sectors either slowed or also declined. The economy was heading for the doghouse long before the world heard of Covid,” Mr. Thompson has said in a statement.
In response to the mid-year budget review presented in Parliament by the Finance Minister, critics of the economic policies expressed their dissatisfaction, stating that the Minister has turned the exercise into a comical display of incoherent biblical quotations.
“And whilst Covid did stagger the economy and put a strain on government finances for most of 2020, it also became a financial bonanza for the government, which raised nearly GH¢28 billion (not the GH¢21.8 billion in the Auditor-General’s report) to fight the pandemic. (The report omitted the GH¢5.8 billion, or US$1 billion, that the IMF gave the government in 2021, in addition to the US$1 billion (GH¢5.6 billion) given in 2020). (Combined tax revenue shortfall in 2020 and 2021 was GH¢5 billion).
“Of the GH¢28 billion, nearly GH¢12 billion (about 43%) “was spent on Covid-related activities”, according to the report, with the remainder going to the nebulously named “budget support,” which could mean anything.
“The positive impact on the economy – and the budget – of all that money is yet to be felt. Rather, the government has followed the IMF’s crazy advice and imposed more taxes and raised the rates for others, ostensibly to “revitalise” the economy and “mobilise revenue”. The woman roasting plantain by the roadside would tell you this is madness, and it is, as reflected in the minister’s gloomy economic prophecy for 2023.”