The Senior Minister designate, Mr Yaw Osafo Maafo has revealed that Ghana is currently a heavily indebted but not a poor country. On the basis of this, he says the country cannot apply to enjoy the benefits of a Heavily Indebted Poor Country (HIPC).
Speaking to the media after President Akufo-Addo had addressed a press conference to announce the first batch of his ministers, the former finance minister said though the immediate past National Democratic Congress (NDC) administration left Ghana a debt to Gross Domestic Product (GDP) ratio of 72%; it is still a lower middle income country, with per capital income of $1300.
He, however, expressed concern over the previous government's inability to fulfill some of the conditions laid down in the programme, entered into with the International Monetary Fund (IMF).
He noted, for example, that deficit per the agreement, should have been brought down to 5%, but at the end of December, the figure stood at 8%.
According to the Bank of Ghana, Ghana's public debt stood at GHC110 billion at the end of July last year, which was 66% of the total value of the economy at the time.
This means that in less than a year, the debt to GDP ratio has moved up by 6% from 66% to the current 72% announced yesterday by Mr Osafo Maafo.
Despite the gloomy nature of the economy, Mr Maafo insists that it is still fundamentally strong, except that it has suffered from years of mismanagement at the top and that the Akufo-Addo administration would work around the clock to make it healthy.
This, he continued, is a huge challenge to the New Patriotic Party (NPP) administration because they promised to reduce some of the taxes, which he described as nuisance and at the same time work around the clock to raise revenue for the development of the country.
To overcome the first hurdle, Maafo said Nana Addo's economic Management team would carefully study and block all the revenue leakages without compromising on the promise to reduce taxes.
Ghanaians have always been complaining about huge taxes that have been imposed on them. Somewhere last year, the former government, led by the Finance Minister; Seth Terkper, introduced the energy sector levies which resulted in the upward adjustment of electricity and petroleum tariffs.
The government argued then that, the new tax was necessary to raise funds to offset the huge debts that had accumulated in the energy sector.
Former President John Mahama himself defended the new levy, arguing that it was a necessary evil to save state intuitions like the VRA and ECG from collapsing.
In August last year, the former Finance Minister, Seth Terkper, announced at a news conference in Accra that the new levy had raked in 350 million Ghana Cedis.
Though the levy was helping the government to balance its books, majority of Ghanaians were not happy, since it resulted in the upward adjustment of energy tariffs and the concomitant effect on the other sectors of the economy.
Following this protest from Ghanaians, the then Presidential Candidate of the New Patriotic Party, Nana Akufo-Addo promised to cut down on some of the taxes to ease pressure on the tax payer – a promise Mr Yaw Osafo Maafo has promised to fulfill.
President Akufo Addo had earlier told news men at the Flagstaff House that the poor economy was a major problem confronting Ghanaians, hence his resolve to assemble a crack team of economists, led by his Vice President, Dr Mahamadu Bawumia, which also includes Mr Osafo Maafo, who he described as the best Finance Minister in Ghana's history, to tackle the problem.
By Emmanuel Akli