Mahama-led government also had challenges – Seth Terkper replies Bawumia
Former Finance Minister Seth Terkper has expressed his thoughts on the lecture by Dr Bawumia on the state of the economy. He said the Mahama administration also went through some challenges which include a shortage of gas supply from Nigeria, Single Spine and a fall in commodity prices.
According to the former Finance Minister, the administration envisaged these challenges and took immediate steps including the discovery of three oil fields and an end to the Petroleum Revenue Management Act buffers, to deal with the situation.
He criticized the Akufo-Addo administration for failing to anticipate the Covid-19 crisis and hence struggling to deal with the ravages on the economy.
“To diminish the impact of the global financial crisis, shortage of gas supply from Nigeria, single spine, fall in commodity prices (2014) is to explain why, with 3 oil fields, we stopped PRMA buffers, failed to anticipate COVID-19 and struggle to manage the crisis with about $6b,” Mr Terkper tweeted to react to the public address delivered by the Vice President on the Economy, on Thursday, April 7.
Dr Bawumia indicated that the Covid expenditure, the banking sector clean-up exercise and payment for excess power in the energy sector as a result of the contracts signed by the National Democratic Congress (NDC) administration, accounted for the rising public debt.
With regards to Covid-19 expenditure, he stated that the government needed to save the lives of the people hence the decision to prioritise spending in the health sector in order to restore the health of the people.
He said spending in all these areas cost the government ¢50.1billion.
But for the banking sector and the Excess Energy payment, he said the debt would be hovering around 68 per cent instead of 81 per cent.
“Between 2019 and 2021 Ghana’s debt to GDP increased by 17.6 percentage points of GDP. It should be noted that without the 15.1 billion of the exceptional items – the financial sector and then the energy and Covid, Ghana’s debt to GDP would have been about 68 per cent instead of the current 80 per cent,” he said.
Dr Bawumia also blamed the current hardships in the Ghanaian economy on the ongoing geopolitical tension between Russia and Ukraine.
