Each year, President John Mahama assures Ghanaians to look forward to better days ahead with a promise to turn the economy around before the next year begins but for many, these promises are yet to materialize.
At a press conference in Accra last week, the Finance Minister, Seth Terkper, stressed that the economy has made a turnaround, adding that, prospects now look brighter.
“The country’s fiscal consolidation is bearing fruits, our gap between revenues and expenditures is narrowing. Budget deficit which stood at a dreaded 11.5% of GDP is now down to 7.0% in 2015,” he said, stressing that, ‘this is the first positive turn we have had since 2005.’
When reached for comments, the Obuasi West MP for the opposition New Patriotic Party (NPP), Kwaku Kwarteng, said the recent economic figures put out by the government were nothing more than propaganda for elections campaign.
“With general elections less than 11 months away, government appears to have conceded that it cannot turn the economy around,” he observed.
He continued: “When you look at the figures, it suggests clearly that government is trying to prepare the ground for the elections. It has nothing to do with the economy.”
The Obuasi West MP, who is a renowned economist, however, noted that, economic figures put out by the Finance Minister were designed to create an impression that the economy is beginning to turn around, which according to him was not true.
“Ghanaians are not sharing in government’s confidence,” he said.
Business confidence dropped
Business confidence in the economy for the last three months of 2015 dropped. This is according to the latest Business Barometer survey conducted by the Association of Ghana Industries (AGI), which samples the views of top Chief Executives on the business environment.
The latest edition highlighted the cost and supply of electricity as the number one challenge for businesses between October and December 2015. The base index for the survey is 100 and this dropped to almost 93.12 points.
The AGI President, James Asare Agyei expressed disappointment about the dip, saying it has negative implications for the economy. The unstable currency was the second biggest challenge, followed by what some of the industry players referred to as “excesses taxes”, including mainly the Energy Sector as Levy.
Explaining further, he said any significant progress should show through how much it costs businesses to borrow. This cost, known as interest rate, has remained unacceptably high.
“Even the figures are not looking good….the Bank of Ghana in recent times has been raising the policy rate what it means is that lending is going to be more expensive”. He said although government is happy to pat itself on the back, businesses still find it difficult to borrow or expand.
Although Hon. Kwarteng conceded the cedi has stabilised, he pointed out that this stability is because borrowed dollars have been injected in the economy. Sooner or later, when these borrowed monies would have to be paid back, it will affect the cedi stability.
When you look at the figures it suggests clearly that government is trying to prepare the ground for the elections. It has nothing to do with the economy.
By John Kelly
