The New Patriotic Party, NPP, has advised the opposition National Democratic Congress NDC, to stop misleading Ghanaians on the current state of the economy since their propaganda would not change the love and trust that the good people of Ghana have for the government.
The Party’s Director of Communications, Richard Ahiagba, at a press conference yesterday said The NDC has misled many Ghanaians to think that the government has mismanaged the economy since assuming office. “This claim by the NDC however is not supported by the hard economic data and the reality around the world’, he stated.
According to Ricard Ahiagba, The NDC is desperately trying to make this government unpopular with false claims and tags, hoping that Ghanaians will buy into it.
“In all these, the NDC has not provided any credible alternative solution(s). They are talking a lot but not about solutions. It is blame, mischaracterization and denial of obvious global economic realities. They talk through you so; you know what I am talking about.
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PRESS UPDATE
ADDRESSED BY THE NATIONAL COMMUNICATIONS DIRECTOR,
RICHARD AHIAGBAH FEBRUARY 22, 2023 INTRODUCTION
- Good afternoon and thank you for coming. Today’s meeting marks the second in a series of bi-weekly Press Updates by the
Communication Directorate of the New Patriotic Party (NPP).
2. Today’s Press Update focuses on the economy, and will address the following issues: a. Provide an overview of the economy the NPP inherited in 2016/2017;
b. The economic progress and gains before 2020; c. Impact of exogenous factors on the economy post 2020; d. And the remedial Measures to build forward;
3. Friends from the media, the NDC has misled many Ghanaians to think that this government has mismanaged the economy since assuming office. This claim by the NDC however is not supported by the hard economic data and the reality around the world.
4. This press conference will provide you with the accurate and reliable information on the performance of this NPP government led by President Nana Addo Dankwa Akufo-Addo, since assuming power in 2017; and to permanently retire the NDC’s propaganda around the economy.
INTRODUCTION
• Friend from the media, in your studios, platforms and now aggressively on social media, the NDC is desperately trying to make this government unpopular with false claims and tags, hoping that Ghanaians will buy into it.
• In all these, the NDC has not provided any credible alternative solution(s). They are talking a lot but not about solutions. It is blame, mischaracterization and denial of obvious global economic realities. They talk through you so; you know what I am talking about. • The NDC is all words and no solutions• So, what is the NDC’s record in managing Ghana’s economy? • Let us examine the data from verified sources such as the Ghana Statistical Service, the Bank of Ghana and the World Bank, among others.
ECONOMIC PERFORMANCE UNDER NDC—GROWTH BY SECTOR:
2013 – 2016
Source: GSS
Year Service Sector Agriculture Sector Industry Sector
2016 2.8% 2.7% 4.3%
2015 2.9% 2.1% 1.2%
2014 5.2% 0.9% 1.1%
2013 10.1% 5.7% 4.3%
ECONOMIC PERFORMANCE UNDER NDC
• What is the implication of this very abysmal performance of the NDC in the real sector of the economy?
• The sector consists of activities that everyday Ghanaians are engaged in for example—trading, farming, operating a momo service, small decoration business, barber shop, hairdressing and taxi or Trotro
services.
• Friends from the media, poor performance in the real sector means that the vulnerable in our society, the
poor, the vast majority of Ghanaians were impoverished under Ex-President Mahama and the NDC.
ECONOMIC PERFORMANCE UNDER NDC—SECTOR GROWTH AND GDP (2013-2016)5.70.92.12.74.31.1 1.24.310.15.22.9 2.87.34 3.9 3.72013 2014 2015 2016Agriculture Industry Service GDP Growth Rate
ECONOMIC PERFORMANCE UNDER NDC
MONETARY SECTOR DEVELOPMENT—DEPRECIATION
• 2013 – 14.5%
• 2014 – 31.3%
• 2015 – 16%
• 2016 – 10%
YEAR RATE (%)
2013 13.5
2014 17
2015 17.7
2016 15.4
ECONOMIC PERFORMANCE
UNDER NDC—MONETARY SECTOR
DEVELOPMENT—INFLATION
YEAR-ON-YEAR
INFLATION
UNDER NDC
ECONOMIC PERFORMANCE UNDER NDC—
MONETARY SECTOR DEVELOPMENT—POLICY RATE
Year MPR
2013 16
2014 21
2015 26
2016 25.5
SUMMARY OF ECONOMIC PERFORMANCE UNDER
NDC
• Continuous plummeting of GDP despite significant inflows oil revenues and IMF program support in 2015 • Abysmal real sector performance especially in Agriculture
• Sustained deterioration of the Cedi against the US dollar • High Inflation in an undisrupted economic environment • High cost of borrowing • Friends from the media, such was the economy the NPP inherited by the NPP in 2017. But what
happened afterwards? Did this the trajectory in 2016 continued, or there was a complete turnaround?
ECONOMIC PERFORMANCE UNDER NPP—MONETARY
SECTOR DEVELOPMENT—POLICY RATE
Year MPR
2017 20
2018 17
2019 16
2020 14.5
SUMMARY OF ECONOMIC PERFORMANCE UNDER
NPP • Sustained economic growth on all fronts until the Covid-19 disruption in 2020.
DEBT ACCUMULATION 2014-2020 • Friends from the media, you know the NDC talks a lot about borrowing and how that is why the economy is struggling.
• The fact is that, it is simply not true that this government has over borrowed.
• Let us review the debt development between 2014-2020 to prove it.
DEBT DEVELOPMENT—2014—2019
IMPACT OF COVID-19 ON GHANA’S ECONOMY
• Friends from the media, in the midst of the impressive economic delivery of this NPP government, the Covid-19 pandemic struck in 2020, thereby eroding growth momentum of the economy and gains due to a global recession brought on by the CORONAVIRUS PANDEMIC.
• This next graph shows where the economy was and where COVID-19 started to ravage Ghana’s economy.
IMPACT OF COVID-19 ON GHANA’S GDP
Following the entrance of Covid-19, the Ministry of Finance conducted an assessment of the likely budgetary impacts. On the revenue side, government projected a loss of about GH¢ 5.7 billion in oil revenue due to the two-thirds decline in crude oil prices. • Non-oil revenues was projected to fall by a conservative estimate of GH¢ 2.3 billion due to the slowdown in economic growth. • Everything started to unravel everywhere in the world very fast.
INITIAL GOVERNMENT RESPONSE TO THE IMPACT OF
COVID—19
• The war in Ukraine upended the fragile economic recovery from the Covid-19. the Russia-Ukraine War caused food and commodity prices to increase
and globally inflationary pressures. • As result of rising inflation, advanced economies such as the US Federal Reserve have had to increase their policy rate as part of measures to manage their rising inflation.
• The main issue with the US Federal Reserve’s higher interest rates is that it devalues other currencies in relation to the dollar, making it more
expensive to pay-off current debts and creates the environment for capital flight away from perceived riskier economies to the west.
• This resulted in massive portfolio outflow by investors who held Ghana’s domestic instruments.
• Some of the effects of the increase in the US Federal Reserve interest rate are as follows: i. Depreciation of the cedi to the dollar—Cedi lost more than 50% of its value in the first quarter of 2022 ii. Adverse impact on our reserve position iii. Triggered rating downgrades iv. Auction shortfalls, to mention a few. • News publications alluding to this fact is presented in the next slide.
EVIDENCE OF THE IMPACT OF COVID—19 ON GHANA’S ECONOMY
INITIAL GOVERNMENT RESPONSE TO THE IMPACT OF COVID—19
• Friends from the media, the 2022 budget debacle with the opposition party whereupon the E-Levy was delayed up until May 2022, dealt a grave blow to Ghana’s growth momentum gathered in 2021, showing a strong 6% GDP growth in the Q4 of 2021.
• It created an impression in the capital market that Ghana may not be able to service its debt. • This triggered credit downgrades by rating agencies which further caused panic and Ghana notes moved to distressed levels.
• As a result, inflation started soaring, and the cedi the depreciated.
• Looking ahead, President Nana Akufo-Addo requested the Minister for Finance to seek an IMF Bailout in July 2022.
INITIAL GOVERNMENT RESPONSE TO THE IMPACT
OF COVID—19
• On the account of the delayed passage of the E-levy, coupled with considerable
deterioration in the domestic and external sectors, a DSA was conducted by the
ministry of finance which revealed Ghana as a high risk of debt distress.
• Ghana’s debt actually exceeded 100% of GDP and debt service constituted about
70% of tax revenue. • Given this situation, Ghana qualified to apply for a Fund program.
WAY FORWARD
• Friends from the media, let’s envisage a scenario where you woke up one morning,
dressed and ready to go to work. While waiting for your ride, someone mistakenly rides
his bicycle into you, injuring you in the process!
• Would you say that you would not wait outside for a ride or go to work ever again? Of course not. You would go work again however, you will surely put in measures in place to ensure that the unfortunate calamity never befalls you again.
• Just like this analogy, one question on the lips of every Ghanaian is to know what
government is doing to bring the economy.
WAY FORWARD
• Government has introduced the Post Covid-19 Program for Economic Growth (PC-PEG) to among others establish a sustainable macro-fiscal path, restore debt sustainability and macro-economic stability underpinned by key structural reform and social protection.
• The PC-PEG will address the economic challenges of this country through fiscal consolidation, det treatment and
structural reform.
• The Government through the Central Bank has responded with a raft of monetary policy measures, including the bi-weekly FX forward auction, and the BDC forex auction which has helped subdue the pressure on the spot FX market.
• To complement the monetary policies which have been activated, the Government has subsequently announced Expenditure-led measures including a 30% cut in discretionary expenditures, a moratorium on new creation of government units, a freeze on government travels, 30 percent cut in salaries of the executive and political appointees, among others.
• Implementation of the Gold for Oil (G4O) Policy
WAY FORWARD
• Implementation of the COVID-19 Alleviation & Revitalization of Enterprises Support
(CARES) Program, to inject some Ghc100 billion into the economy.
• Government’s transformative agenda to digitalize the economy. This will help
formalize the Ghanaian economy & improve its administrative systems & global
competitiveness.
• Banking Sector Reforms with a Tighter Regulatory & Supervisory Framework. A key component here is the Operationalization of the Ghana Deposit Protection Scheme to insulate the national budget from costs arising from banking sector failure.
CONCLUSION
• Through these innovative measures, the government is demonstrating its resolve to build back the economy quicker and restore fiscal rectitude. • Government’s commitment to these measures is a clear assurance that we are on the right track and capable of causing a turnaround of the economy with the resolute support of all Ghanaians.
