CAUCUS FOR DEMOCRATIC GOVERNANCE, GHANA (CDG-GH)
PRESS RELEASE
27TH JULY 2020
VODOO BUDGET OF A DESPERATE GOVERNMENT
Prides itself in negative growth
The Caucus for Democratic Governance, Ghana (GH-Gh), on the basis of what the Minister of Finance read last Thursday in Parliament, can only conclude that the Mid Year Review Budget projects a contracting economy, characterized by budget deficit and negative growth.
In trying to put the blame on COVID-19, the Minister of Finance is expected to know, that many African Countries have positive growth between 2%-3%. In West Africa, countries like Ivory Coast and Senegal have all positive growth of 3% inspite of COVID-19.
MACROECONOMIC FIGURES
What is worrying is the deceptive picture created by the fictitious data thrown out since 2017 by vodoo economist Dr Bawumia. On the basis of these figures, Ghana becomes one of the fastest growing economies in Africa. The fictitious data and fraudulent engineering of accounting figures, made our economy robust and one of the strongest in Africa. The truth however became obvious when the economy showed signs of collapse after three weeks of COVID-19. Excellent macro economic figures with growth rate of between 6.4% to 8% could not save us.
CAUSES OF WEAKNESSES
The former President, John Mahama often cautioned the Finance Minister for engaging in creative accounting, indicating that a number of debts are put under the base line to escape accounting. This weakens the resilience of the economy.
When the baseline to GDP is changed, to induce flowery figures, that presupposes a robust economy, then the economy is bound to collapse in three weeks of strain and stress.
When this Government borrows heavily (126 billion ghc in 3.5 years , the highest in the history of Ghana), the debt distress becomes high. When the debt distress is high, we have no option but to run quickly to IMF for rescue.
Instead of the Government aggressively embarking on austere measures of pruning down the size of the Government appointees, reducing taxes, reducing imports and investing in productivity to make saving, she is stampeding the resources of Bank of Ghna (BoG) to weaken the economy.
An economy where BoG is forced to print 5,5 billion ghc to finance Government operations and is planning to print more; cannot be a robust economy. This action is a breach of the Bank of Ghana Act.
Where the BoG is converted into extension of the Ministry of Finance, the foundation of the economy, with time, becomes weak.
In an economy where figures on Internal reserves, Fiscal Deficit of GDP and Primary Balance % of GDP are manipulated in the budget, the economy is programmed to go on its knees in three weeks of COVID-19.
Dr E.K.Hayfod
Executive Director, CDG-Gh
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