- 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. See https://www.myjoyonline.com/ghanas-economy-showed-signs-of-challenges-even-before-covid-19-world-bank/
For instance, before COVID-19 was recorded in Ghana in March 2020;
I) the Public debt had increased from 120 billion cedis in 2016 to 225 billion cedis, representing a nominal increase of 105 billion cedis 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 11 billion cedis in 2016 to GHS37 billion in 2019;
IV) budget deficit had hit 7.5% in 2018 and 7% in 2019 even though 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 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 had declined from 8.4% in 2016 to -8.5% in 2019 and the manufacturing sector had declined from a growth rate of 7.9% in 2016 to 6.5% in 2019 under the much-touted 1D1F initiative.
- 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 43.9 billion cedis.
- In 2020 when COVID struck, government projected tax revenue of 47.2 billion cedis, revised same to 42.7 billion cedis and exceeded its revised target by collecting a total of 45.3 billion cedis at the end of the year.
See https://www.graphic.com.gh/business/business-news/gra-exceeds-2020-revenue-target.html
- In 2021, government projected tax revenue of 57.055 billion cedis but recorded a total of 57.32 billion cedis (I.e 265 million cedis more projected tax revenue). See https://www.ghanaweb.com/GhanaHomePage/business/GRA-exceeds-revenue-collection-target-for-2021-by-265-million cedis-1446286
- The Akufo-Addo/Bawumia has had close to 30 billion cedis (equivalent to about 5 billion dollars) 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 5 billion dollars to manage COVID-19 but have done far better than Ghana.
- 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 500 billion cedis in the last five (5) years, as compared to the paltry 200 billion cedis that accrued to the NDC/Mahama government. Their economic mismanagement and wastefulness is what has led us into another IMF program. Any government, that has had access to over 500 billion cedis 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.
- 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 does COVID and the four (4) months old Russia-Ukraine war leave Nigeria, Benin etc. to attack only Ghana?
NCB-HQ
