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Spending to win elections cause of economic crisis, not Coronavirus – Mahama to government

 

 

 

Former President John Dramani Mahama has accused the Akufo-Addo-led government of eroding most of the gains he made and bequeathed to them when he was President and left power.

Mr Mahama said the government has plunged the country into economic crisis.

He said the government citing COVID-19 as the reason for the crisis and the attendant economic hardships is false because although COVID-19 affected the economy, it is, however, not the main reason why the country is in the current “hole we find ourselves.”

 

 

“COVID-19 only became a pretext for reckless election-related spending, which produced the largest-ever budget deficit in the recent economic history of Ghana last year. Our debt has ballooned to unsustainable levels – topping 80% of GDP – exposing us to very high risk of debt default,” Mr Mahama bemoaned.

Speaking at the State of the Economy Forum organized by NDC pro-forum on Monday, 6 September 2021, Mr Mahama noted that “Almost all of our tax revenue is used to service our debt and the effect has been the introduction of several new taxes.

 

 

“This has led to rampant increments in the prices of goods and services. This is primarily responsible for the hardships Ghanaians are going through now.”

“A comparison with our neighbours and peers in Sub-Saharan Africa, all of whom were also affected by COVID-19, shows they have been able to protect their citizens from COVID-19 in ways that are similar to ours. They have, however, avoided increasing their debts and deficits because of more prudent management of their economies,” he stated.

Mr Mahama said this government must accept that it is their mismanagement of the economy, their thirst for consumption expenditure and the desire to spend beyond means in order to win elections that have plunged the country into the current crisis, not necessarily COVID-19.

The former Ghanaian leader further noted that Akufo-Addo’s administration has been the luckiest government under the fourth republic because “they have benefitted from 60% of all the oil revenue accruing to Ghana since we began producing oil, they have had more than twice the total tax revenue available to us and have enjoyed unprecedented support from our development partners.

“Within a space of 12 months, they have received up to GHS11 billion from the IMF alone and over $200 million from the World Bank and other donors. They had access to over $200 million from the Stabilisation Fund we set up and got Central Bank Financing of GHS10 billion whereas we had zero financing from the Central bank in 2016 despite all our challenges. They have also increased our debt by almost twice the total amount of all previous governments put together. All of this notwithstanding, they have the least to show in terms of tangible gains or capital investments.”

Mr Mahama reiterated his earlier call that the NDC stands prepared to engage in fruitful national dialogue aimed at finding concrete solutions to the country’s most pressing problems.

 

 

 

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