I Will Fix Broken Economy … Says President Akufo-Addo

President Akufo-Addo has told Parliament that the previous National Democratic Congress (NDC) government did not tell the true state of the Ghanaian economy. He, however, told the law makers that he was not elected by Ghanaians to complain, and that he would fix the broken economy.

“But, I was not elected by the overwhelming majority of the Ghanaian people to complain. I was elected to get things done. I was elected to fix what is broken, and my government and I are determined to do just that,” he said

Delivering his first State of Nation Address to the august House yesterday, Nana AddoDankwa Akufo-Addo revealed that Ghana's total debt has jumped from GH¢9.5 billion at the end of 2009, to a staggering GH¢122 billion at the end of December 2016, which is 74% of the Gross Domestic Product (GDP), “after all the previous denials to the contrary.”

He noted that more debt was accumulated by the previous government in the last eight years than all other governments put together since independence. According to him, 92% of Ghana's total debt stock was incurred in the last eight years under the previous NDC government. The interest costs on this debt, he added, have also increased, and will amount to an estimated GH¢14.1 billion in 2017.

President Akufo-Addo explained thatas a result of policy choices, the country finds itself in a situation where its total revenue is consumed by three main budgetary lines – wages and salaries, interest payments,amortisation and statutory payments. He added that these three items alone account for 99.6% of government revenue.

“This means that anything else that government has to do outside of these lines will have to be financed by borrowing or aid. After eight years of the previous government, there is practically no fiscal space left. The persistent resort to borrowing for any additional expenditures to meet the aspirations of our people is also not sustainable. We cannot continue this way with our public finances. I will not allow this economy to collapse under my watch. We will reduce, significantly, the fiscal deficit this year,” he expatiated.

The President, again, said that the IMF programme negotiated was ostensibly to restore fiscal discipline, debt sustainability and increase economic growth, also the previous government promised Ghanaians that the reckless public expenditure that characterised the 2012 election year would not be repeated in 2016.

“Mr. Speaker, the promises to the Ghanaian people were, however, not kept. In fact, virtually all the targets under the IMF programme, as at December 2016, have been missed. Fiscal indiscipline, once again, reared its head in the 2016 election year. Total projected expenditure for 2016 was GH¢43.9 billion (26% of GDP), but actual expenditure amounted to GH¢50.3 billion (30.2% of GDP). The full facts of the situation have not been put before the Ghanaian people.

“It appears, from what we are finding out, that some GH¢7 billion of arrears and outstanding payments circumvented the very public financial management system that was put in place to prevent such occurrences. These expenditures are being currently audited.

“Mr. Speaker, at the same time, revenue performance for the year was poor.  The total revenue target for our country was GH¢37.9 billion (22.7% of GDP), but the actual revenue came in at GH¢33.2 billion (19.9% of GDP),” he remarked.

President Akufo-Addo continued that the combination of higher expenditures and lower revenues than projected, resulted in a significant increase in the budget deficit for 2016, citing that, as compared to a target of 5.3% under the IMF programme, the fiscal deficit for 2016 was 9% of GDP on a cash basis, and 10.2% of GDP on a commitment basis (that is on the basis of expenditures undertaken, but not yet paid for).

It would be recalled, the President said, that at the time Ghana entered into the IMF programme to restore fiscal discipline, the fiscal deficit was 10.2% of GDP. It is very clear, therefore, that the objectives set out in the programme have not been achieved.

“Mr. Speaker, the increasing fiscal deficits were financed by increased borrowing. As at the beginning of 2009, Ghana's total debt stock was GH¢9.5 billion. It gives me no joy to tell the story of the economy as it is – as we inherited it. Too much time, energy and resources were spent in the past, in my view, without a deliberate, conscious assessment of their impact on jobs, and whether or not we were spending wisely to improve the lives of the people, communities and businesses.

“But, I was not elected by the overwhelming majority of the Ghanaian people to complain. I was elected to get things done. I was elected to fix what is broken, and my government and I are determined to do just that. At the beginning of March, the Minister for Finance will come to this House to lay out in the national budget the details of our economic policy, and the clear roadmap that we have laid out for taking the country out of its current predicament, and onto a sustainable path of recovery, jobs creation and prosperity.

“I am absolute in my confidence that we have the programme, the competence, the commitment, and the goodwill of the people to turn things around. By the Grace of God, we will succeed, and I believe this House knows it too. In the immediate term, targeted legislative policy and institutional reforms will have to be undertaken to unleash the suppressed potential of the economy and allow Ghanaian entrepreneurship to rise and thrive, domestically and internationally,” he said

By Maxwell Ofori, Parliament House