During his much-anticipated speech about Ghana’s economy, the Vice President and Head of the Economic Management Team enumerated some key items that led to the high public debt the country is having now.
According to Dr. Bawumia, expenditure on Covid-19, banking sector clean up and payment for excess power in the energy sector as a result of some contracts signed by the previous National Democratic Congress government are the things that led Ghana into this situation.
On the issue of Covid spending, he argued that the government needed to save the lives of the people hence the decision to prioritise spending in the health sector to restore the health of the people.
Delivering his speech at a forum held by TESCON, the student’s wing of the New Patriotic Party (NPP), he explained that, spending in all these areas cost the government GH¢50.1billion.
Without the banking sector clean up and the excess energy payment, he said the debt would be hovering around 68 per cent instead of 81 per cent.
He also attributed the current hardships in Ghana to the ongoing geopolitical tension between Russia and Ukraine.
Dr Bawumia revealed that Russia accounts for some 30 per cent of Ghana’s imported grains, 50 per cent of flour and 39 per cent of fertilizer.
The war, therefore, has heavily affected the local economy, he noted.
“The increase in commodity prices has been exacerbated by the Russia-Ukraine conflict. Russia and Ukraine together account for 30 per cent of the global wheat export. The longer the conflict the greater will be the disruptions to the global food supply. The country is also likely to slow global growth.
“According to the AfDB, the price of wheat has shot up by 62 per cent since the war began. The price of fertilizer is up by 300 per cent, and the price of maize is up by 36 per cent since the war begun. Here in Ghana 60 per cent of our total imports of iron ore and steel are from Ukraine.
“Russia accounts for some 30 per cent of Ghana’s imported grains, 50 per cent of flour and 39 per cent of fertilizer. So we are directly affected by the Russia-Ukraine war. Unfortunately, we do not know when it will be over. The global increase in fuel prices is causing hardship.”
He further said he recognizes that the country is going through some challenges at the moment.
He, however, indicated that some measures have been introduced by the government to ameliorate the hardship the people are going through.
He said “from the man on the streets to the business mogul, the health of the economy is the foundational instrument.
“The economy is what we feel in our pockets. I acknowledge that we are going through difficult times, this is the reality. Our economy is experiencing rising prices of fuel and virtually all commodities. Prices are on the rise.”
“These have come as a surprise to many Ghanaians and many questions have been asked about the state of the economy. Do these questions include what has happened to the fundamentals? Why are the prices of goods and services increasing so fast? Why has the Cedi depreciated so fast this year?
“What programmes does the government have to show for the higher debt? Where is the new economy that the government promised to build? I will address these questions based on data and facts.
“I will admit where there have been challenges and we will all leave here with a better state of the economy, where we have come from and where we are going, ” he stated.