Former Finance Minister Seth Terkper, is concerned that the Akufo-Addo administration is trying to use the COVID-19 pandemic to mask a deteriorating economy.
Speaking on Citi TV‘s The Point of View, Mr. Terkper challenged the government to come clean on the distinct stresses on the economy during the mid-year budget later today, Thursday.
“I am not downplaying COVID-19. I need to be very clear on this, but I am saying that a lot was happening already [to the economy].”
The government notably said the pandemic would cost the state over GHS 9 billion and Mr. Terkper, held that this would account for 2 out of about 10 percent of Ghana’s budget deficit.
The International Monetary Fund had predicted that Ghana’s budget deficit would be above 7 percent in December 2019. The estimate went up by 2 percent in March 2020.
The former Finance Minister noted recent financial support like the $1 billion IMF Rapid Credit Facility to mitigate the impact of the COVID-19 pandemic on Ghana’s economy as contributing to the deficit.
Mr. Terkper criticised this particular facility as a return to the IMF despite the government’s assertions that it had moved beyond the IMF.
U-turn on relationship with IMF
He also felt the move for IMF support was too quick given the claims that the economy was being well managed.
“Why did we make a U-turn after we exited the IMF. Exit means that you won’t go to the IMF for a programme. We went to the IMF in March, very early into COVID.”
“The question we should ask is why didn’t other African countries rush to go to the IMF in March and April? According to the government, we had a stronger economy than other African countries and we were comparing ourselves.”
He thus feels the government is primed to use the pandemic as an excuse “to cover the deficit”
“…The gap which I am talking about from Article IV [IMF assessment in December 2019] as a result of the adjustments which you are talking about.”
“If you are going to say the deficit is 10 percet or 9 percent, don’t say it is all on account of COVID,” Mr. Terkper said on The Point of View.