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24.11.2008 PNC News

PNC commends IEA for exposing economic bankruptcy

PNC commends IEA for exposing economic bankruptcy

The Peoples National Convention (PNC) on Monday commended the Institute of Economic Affairs (IEA) for exposing the true state of the economy, which the institute said was deteriorating since 2006 and continued in 2007.

Mr Anbataayela Bernard Mornah, PNC General Secretary in an electronic mail to the Ghana News Agency in Accra, described the IEA's “Annual 2007 Economic Review and Outlook,” document as a bold independent identification and diagnosis of the ailing economy.

He therefore called on the ruling New Patriotic Party (NPP) to stop white washing the “economic sepulchre,” they have created over the past eight-year through misrule and immediately convene a bi-partisan economic think-tanks forum to analysis the true state of the economy.

Mr Mornah said the IEA's report also exposes the deception captured in the NPP Election 2008 manifesto, which the NPP trumpeted as classic benchmarks of success in its stabilization of the economy.

The PNC General Secretary said the PNC manifesto dubbed economic prosperity on the other hand has catalogued economic stimulus that would lead Ghana out of this quagmire by growing the economy at 10 percent annual rate through agriculture.

He said a Dr Edward Nasigrie Mahama-led Government would also enhance the quality of schools from basic to tertiary, re-aligning courses offered in the universities to reflect the needs of the labour market and industry.

The NPP in its manifesto had claimed a restored macroeconomic balance, low and declining rates of inflation, lower interest rates and a stable currency that has held its own for six straight years.

According to the NPP the interest rate front, the Bank of Ghana rate now stands at a mere 17 percent while the 91-Day Treasury Bill rate has declined to 24 percent. This has made it possible to expand total credit to the private sector from 12.5 percent of GDP in 2000 to 28.4 percent of GDP in 2007.

The NPP claimed that with the cost of borrowing reduced significantly, the private sector is now in a better position to access credit to expand their businesses. We have been able to improve our external reserve position as at December 2001, from US$ 253 million equivalent of three weeks import cover to US$ 2.3 billion equivalent of three months cover as at year end 2007.

“The ultimate proof of our superior management of the Ghanaian economy has been our ability to grow the economy, in nominal GDP terms, from US$ 3.9 billion in 2000 to US$ 16.3 billion in 2008,” the NPP stated.

The PNC General Secretary said: “IEA has exposed the deception in the NPP manifesto as the report shows that the real GDP, the economy grew at a rate of 6.2 per cent down from the 6.4 per cent recorded in 2006.

“The 6.2 per cent economic growth rate recorded for 2007 was also slightly below the government's target of 6.5 per cent documented in the government budget statement for 2007.”

The IEA survey also revealed that the agriculture sector grew at a rate of 3.1 per cent lower than the revised growth rate of 4.5 per cent achieved by this sector in 2006. The growth rate of the agriculture sector was also significantly below the government's target of 6.1 per cent contained in the government 2007 budget statement.

The Cocoa sub-sector declined drastically in 2006 and this decline continued in 2007. The growth rate of 3.5 percent achieved in 2007 was below the projected target rate of 6.0 percent stated in 2007 budget.

The forestry and logging sub-sector did not grow as expected, falling marginally from 2.6 percent in 2006 to 2.5 percent in 2007. The fishing sub-sector performed badly with its growth rate declining sharply in 2007.

The growth rate of the industrial sector in 2007 was 6.6 per cent, about one-third reduction from the 9.5 per cent recorded in 2006. The services sector however grew at an annual rate of 10.0 per cent recorded in 2007 much higher than the 6.7 per cent in recorded in 2006.

The government deficits over the last two years (2006 and 2007) and the high deficit for the first six months of 2008 raise concerns about the sustainability of financing government projects.

Overall there was deterioration of the performance of the economy in 2007 continuing the deteriorating trend started in 2006 despite the achievement of growth rates of slightly above six per cent, the IEA report indicates.

Mr Mornah said these statistical findings shows that NPP have hit the end of the road and must be voted out of government, for fresh ideas to revamp the economy.

“We need change of government to restore hope to the economy, NPP cannot offer any hope for the future. This is the time for real change to restore real hope. We must vote for Dr Mahama as the next President of Ghana”.