Don't blame COVID-19 and Russia-Ukraine war for your economic mess — Sammy Gyamfi

Ghana's economy showed signs of serious challenges even before COVID-19 struck and the World Bank’s country director has been emphatic that our economic challenges persisted even before the pandemic, the Communications Director of National Democratic Congress (NDC), Sammy Gyamfi has said.

His reasons come after Vice President Dr. Mahamudu Bawumia, earlier claimed the recent rise in commodity prices is not due to the government's ineptitude.

He attributed this to external causes outside the NPP administration's control.

Dr. Bawumia blamed the Russian-Ukrainian crisis at a town hall meeting in Kasoa, Central Region.

The Russia-Ukraine war has pushed up commodities costs. Together, Russia and Ukraine export 30% of the world's wheat. The longer the fighting lasts, the more food supply interruptions. It will also hinder global development.

The AfDB says wheat prices have risen by 62% since the fighting began. Since the conflict began, the price of fertilizer has tripled, and the price of corn has risen by 36%. In Ghana, 60% of our total iron ore and steel imports come from Ukraine.

Russia supplies 30% of Ghana’s grain imports, 50% of flour, and 39% of fertilizer. So the Russia-Ukraine conflict directly affects us. Sadly, we have no idea when it will end. The worldwide rise in gasoline costs is a hindrance, Dr. Bawumia stated.

Sammy Gyamfi reacting to the development listed five reasons why the government shouldn't blame COVID-19 and the conflict in Russia and Ukraine for its self-inflicted economic woes.

He said: Ghana's economy showed signs of serious challenges even before COVID-19 struck. The World Bank’s country director has been emphatic that our economic challenges persisted even before COVID.

For instance, before COVID-19 was recorded in Ghana in March 2020;

I) the Public debt had increased from GHS120 billion in 2016 to GHS225 billion, representing a nominal increase of GHS105 billion in the country’s debt stock;

II) our Debt to GDP ratio had increased from 57% in 2016 to 64% in 2019:

III) Interest payment had increased from GHS11 billion in 2016 to GHS37 billion in 2019;

IV) budget deficit had hit 7.5% in 2018 and 7% in 2019 even though the government tried to conceal it from the people by claiming it was 4.8%. It’s instructive to note, that the 2019 budget deficit of 7% was above the fiscal responsibility threshold of 5%;

V) the Ghana Cedi in 2019 saw a depreciation of 12.9%. This was before COVID-19. The cedi depreciated by 9.6% in 2016 despite the serious challenges the country was confronted with.

VI) Growth rate for the construction sector declined from 8.4% in 2016 to -8.5% in 2019 and the manufacturing sector declined from a growth rate of 7.9% in 2016 to 6.5% in 2019 under the much-touted 1D1F initiative.

2. Even though the COVID-19 pandemic has had some negative effects on Ghana’s economy, its overall impact on tax revenue has been insignificant.

* In 2019 before COVID, the Ghana Revenue Authority raked in revenue of GHS43.9 billion.

* In 2020 when COVID struck, the government projected tax revenue of GHS47.2 billion, revised same to GHS42.7 billion, and exceeded its revised target by collecting a total of 45.3 billion at the end of the year.

* In 2021, the government projected tax revenue of GHS57.055 billion but recorded a total of 57.32 billion (I.e GHS265 million more projected tax revenue).

3. The Akufo-Addo/Bawumia has had close to GHS30 billion cedis (equivalent to about US$5 billion) to manage and mitigate the impact of COVID-19, all of which has been largely wasted on election-related expenses. Our peers such as Côte D’Ivoire, Benin, Togo et al, did now get as much as US$5 billion to manage COVID-19 but have done far better than Ghana.

4. The Akufo-Addo/Bawumia government has had revenue from three (3) oil fields with daily production increasing from about 70,000 barrels in 2016 to about 170,000, coupled with high commodity (oil, gold, and cocoa) prices on the international market. In all, this Akufo-Addo/Bawumia government has had total revenue of over GHS500 billion in the last five (5) years, as compared to the paltry GHS200 billion that accrued to the NDC/Mahama government. Their economic mismanagement and wastefulness are what have led us into another IMF program. Any government, that has had access to over GHS500 billion in revenue and still collapses the economy to the point of needing an IMF bailout, must be the worst government in the history of the world.

5. COVID has affected all countries in the world including Ghana. But whereas our peers such as Benin, Togo, Côte D’Ivoire, Burkina Faso, Nigeria, etc. were very responsible in how they spent in 2020 to manage and mitigate the impact of the pandemic on their economies, thereby recording deficits of below 7% and Debt to GDP ratios of below 65%, the Akufo-Addo/Bawumia government borrowed excessively and spent recklessly for election-purposes thereby recording a record-high deficit of 15.7% and a Debt to GDP ratio of 78% in 2020.

In the year 2020 when the COVID pandemic struck, Burkina Faso recorded a deficit of 5.7%; Côte D’Ivoire recorded a deficit of 5.6%; Nigeria recorded a deficit of 5.8% and Senegal recorded a deficit of 6.4%. But Ghana alone recorded a deficit of 15.7% because of the reckless election-driven expenses and wastage the NPP-Akufo-Addo/Bawumia government engaged in.

How do COVID and the four (4) months old Russia-Ukraine war leave Nigeria, Benin, etc. to attack only Ghana?

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