The Government of Ghana, whether from the New Patriotic Party (NPP) or the National Democratic Congress (NDC), should learn to take responsibilities for the challenges in the economy and not blame them on others, the Director of Research at the Institute of Economic Affairs (IEA), Dr John Kwakye, has stated.
Dr. Kwakye says this is what governments in mature economies, such as the United States, the United Kingdom, France, and Germany, do. Dr. Kwakye said this while commenting on the strong defense of the NPP economic record by Vice President Dr. Mahamudu Bawumia.
He said this was expected because he was touted as the “economic Messiah” by the President and chaired the Economic Management Team (EMT).In his address at the University of Professional Studies, Accra (UPSA) on Wednesday, February 7, Dr. Bawumia argued that the NPP managed the economy prudently and efficiently during 2017–19 and managed to turn it around from the precarious situation from which they inherited it in 2016.Dr. Bawumia cited economic growth, inflation, fiscal deficit, debt, and depreciation, among others, as all pointing in the right direction during the period.However, according to him, between 2020-2022, the economy was hit by the COVID-19 pandemic and the Russia-Ukraine war and got derailed by these shocks, as they disrupted global supply chains and precipitated an escalation in food and fuel prices.
Dr. Bawumia also cited the additional adverse effects of the huge financial bailout costs and legacy excess-capacity energy payments. Assessing the address by Dr. Bawumia, Dr. Kwakye indicated that “available data for key macroeconomic indicators for 2016–2023 show that many of the indicators trended positively during 2017–2019. These must be attributed in part to the government’s policies, including the introduction of the Fiscal Responsibility Act in 2018, which limited the fiscal deficit to 5% of GDP.
However, it has to be recognised that the favorable economic performance also occurred against the backdrop of some favorable factors, including higher oil output, especially in 2017; favorable world economic conditions, including stable oil prices and, generally, benign global inflation; and the extended IMF programme, which included some strict policy conditionalities.
For the 2020–2022 period, while accepting the contribution of the exogenous factors mentioned by Dr. Bawumia to the poor economic outcomes, some of the domestic policy failings must also be recognized. These included: huge expenditure outlays on numerous flagship programs and a bloated government; failure to increase revenue from traditional sources; and excessive and expensive borrowing from the international capital markets even as the public debt continued to rise to an unsustainable level. Failing to recognize these policy failings represented a missing link in Dr. Bawumia’s speech.”
He added that it is important that, as the government takes credit for the good economic performance during 2017–2019, it also be prepared to accept some responsibility for the poor performance during 2020–2022. “The apparent suggestion that the government did nothing wrong during 2020–2022 could be interpreted as trying to sweep the policy failings under the carpet. Both the NPP and NDC must learn to not only take credit for the good performance of the economy but also to take blame for poor performance, during their tenure. “That is what governments in mature economies, such as the US, UK, France, and Germany, do. It is how you respond to the prevailing situations that you will be judged by.”
