Former President John Dramani Mahama has disclosed that his attempt to get President Nana Akufo-Addo to organise a stakeholder dialogue where suggestions will be taken from him (John Mahama) and other stakeholders to salvage the economy, has proven futile because Akufo-Addo does not seem interested.
According to Mr Mahama, the economy is in a crisis but the president is not willing to seek advice nor take suggestions from others outside his government to get it back on track.
Speaking on Bolgatanga-based URA Radio, as part of his thank you tour on Tuesday, 17 August 2021, Mr Mahama debunked suggestions that the economy is in a crisis because of the COVID-19 pandemic.
According to the 2020 flag bearer of the main opposition National Democratic Congress (NDC), COVID-19 just exacerbated the situation but already, the management of the economy was in a crisis long before the pandemic hit.
Mr Mahama said: “It is obvious to see things are not the best: the economy is in a crisis and this is not the first time I’ve said the economy is in a crisis. I’ve made my suggestions to him [Akufo-Addo] and it doesn’t appear he’s interested in taking them.”
“On my Facebook, I posted that there was a time when we had a crisis with the economy and difficulties in terms of financing the budget and all kinds of things, so, we needed to come out with a home-grown fiscal policy.
“What did we do? We went to Senchi and we called all stakeholders and we had a consensus on the home-grown fiscal policy. That was the policy we eventually put into a programme at the IMF to begin to turn things around.
“So, I suggested that he [Akufo-Addo] holds a Senchi-like forum so that we can build a consensus around growing the economy but it doesn’t look like it is something they are interested in but the economy definitely is in a crisis, it’s obvious for everybody to see,” Mr Mahama stated.
He noted that “businesses are complaining, especially after the banking sector clean-up”, noting: “It’s wiped out Ghanaian capital”.
“That’s the point and up till now, the president had promised that they were going to pay everybody and there are many people who have not received their deposits that was wiped out by the banking sector clean-up”, Mr Mahama noted.
He said: “Aside from that, the public debt, almost twenty-something billion that has been placed on us, as part of the public debt, has affected the economy and also the freebies during the elections – free water, free light – the finance minister came and said they spent 19 billion on COVID relief; that’s huge, and, so, the indebtedness has to be paid, somehow. That’s how come they’ve introduced the new taxes and all that.”
Mr Mahama noted that “with the way the economy is going, something needs to give”, adding that he “won’t be surprised if this administration eventually goes into some sort of programme with the IMF.”
“It’s easy for everybody to see that the economy was in a crisis before COVID-19 hit”, he said.
“In 2019, it was obvious that the rate of borrowing was excessive and things were not going correctly. COVID just exacerbated it but already, the management of the economy was in a crisis long before COVID arrived”, he asserted.
“Even in our traditional homes, you borrow money for something productive, something tangible. You borrow money to build a house or reroof your house or buy a bicycle to be able to ride to the farm; mostly something that gives a return on investment. [With] school buildings, children are able to learn and get more educated people who will be a good human resource for the country”, he pointed out.
“If it’s healthcare, you’ll keep your citizens healthy and they will be able to work. If it’s roads, you’re able to facilitate the movement of passengers and goods across the length and breadth of the country. If it’s airports, you are able to facilitate local and international travel. There are so many things that you borrow to put in place so that it enhances the productivity of your country and enhances the growth of your country.”
Mr Mahama explained that when he was president, “you could look at our borrowing profile and you could see that it was going into two main things: that is – into infrastructure to provide more roads, hospitals, schools, expand our ports and so on and also into what we call taking off high-interest debts that we inherited”.
“And, so, if we borrowed at an interest rate that was lower, we used it to retire some of the high interest debt that had accumulated especially, the local debt because that mostly had a higher interest rate, so, that’s what a lot of the borrowing went into but we were criticised as over-borrowing but a lot of what we borrowed for was tangible for people to be able to see.
“Four years later, you are witnesses to what has happened: from GHS120 billion of total public debt, today, we are almost hitting GHS400 billion public debt and what most Ghanaians ask is: ‘What have we done with that money?’ It looks like most of them have gone into consumption rather than into providing the country with the kind of infrastructure that we need”.
“It’s only as an afterthought that suddenly they realised we must be doing some infrastructure, so, Agenda 111 has been drawn. There’s no transparency [about] how the money is going to be procured and all that”.
“Is it going to lead into more borrowing when we already have a high level of debt hanging around the country’s neck? So, these are things that we could build consensus around if they were prepared to open up and involve everybody in doing so but it doesn’t look like they are prepared to do so.”