…Says ‘It’s leading economy into the doldrums’
Hon. Benjamin Kpodo, Member of Parliament (MP) for Ho Central, has again taken a swipe at the New Patriotic Party (NPP) and President Nana Akufo-Addo, saying that the economy has been on rapid fall in the last six months.
According to him, the government should swallow pride and face the reality on the ground “as the state of the economy is not the best for Ghana.”
Speaking to The Republic exclusively after the presentation of Mid-Year Budget Review for 2017, Hon Kpodo, who is also a member of the Finance Committee of Parliament, said the government missed the target badly in the first quarter of the year and believed the Nana Akufo-Addo-led government is not performing.
He said, the economy is in a bit of difficulties for the wrong reasons, asserting that, “revenues are going down, revenue target not being met, expenditures are not been in care and eventually economic growth will suffer.”
“So you may not see the negative effect immediately but it will not be long and we will come to the reality. So I think we need a big push, so let us face reality, let us not pretend and let us not bury our heads in the sand thinking that things are good.”
He explained that, the government’s excessive borrowing also has the tendency of crippling the economy on the grounds that the government has taken wrong decision by borrowing at high interest rate to service low interest rate debts.
“Borrowing at high interest rate to retire old loan is financially unwise and it may pose further risk element in the economy if creditors do not agree, it means lack of confidence, the risk is high.”
“If you have domestic treasury bills for 90 days at 16 % and you go borrow at 19% it is very bad. You don’t borrow at high interest rate of 19% to service old debts of interest rate at 16%, it is wrong and it’s financially unwise,” the MP stated.
“In addition, you cannot cut down expenditure and at the same time expect growth to increase, you protect social intervention policies,” he argued, adding that most of the social policies are inter-ministerial policies and wondered how the government would do that without constraining them.
Mr. Kpodo argued further that, the government, under Akufo-Addo, has failed in its approach to develop the economy and hence has been recording negative indices which have pushed the otherwise growing economy into a reverse gear.
He said the cedi has sharply depreciated, as it is now on exchange rate from GHS3.60, under the National Democratic Congress, to GHS4.50 per dollar, and therefore the current NPP government cannot claim the cedi is being stabilized.
On the issue of inflation, the Ho Central MP said the inflation rate in Ghana, which has been decreased to 12.10 percent in June of this year from 12.6 percent in May could not be attributed to the success of the NPP government.
He said it was the work of the previous government under which the inflation rate could be deemed as success and that, it was impossible for the Akufo-Addo government to have within six months brought inflation to such a rate.
Mr. Kpodo reminded that, it was the NDC government, under the leadership of late President John Evans Atta Mills, that the country chalked a single digit inflation rate and that the current inflation should be attributed to the good work of the previous NDC government.
The Finance Minister during the mid-year budget review presentation in Parliament claimed that macro-economic indicators for the first half of the year are pointing in the right direction.
But Mr. Kpodo told The Republic, there is a continuous decline in Ghana’s GDP and warned of a recession if the economy does not become more diverse.
“The statistics available at the end of the first half of the year shows that this is an economy in difficulties but the government do not want to admit and we have to bury our heads and face the reality and cutting down expenditure is not the best, it is an omnibus statement,” he stated.
The member of the Finance Committee of Parliament said the Akufo- Addo administration should pay urgent attention to the management of the nation’s economy, adding that the economy has been on rapid fall since the last six months apparently due to the absence of clear-cut fiscal policy.
Mr. Kpodo assured that, for them, as a minority, they are ready support of the President’s efforts in developing the country; however adding that they are concerned “about the grave economic situation we now face, as well as indices from global economic watchers, which this administration has failed to give deserving attention, despite its predictable negative impact.”
He said, as a responsible minority, they are duty-bound, beyond politics, to draw the President’s attention to the fact that under the prevailing circumstances, the nation is evidently heading to economic doldrums.
Source: Therepublicnewsonline.com/Felix Engsalige Nyaaba