I have sighted a viral video where the former President John Mahama is heard, regrettably indicating that his management of Ghana’s economy was better than the current administration. It’s untrue that John Mahama left a healthy economy. It is also far from the truth that he had left a legacy that was resistant to crisis.
Maybe Mr. Mahama needs reminding that under his watch Ghana for four years suffered persistent electricity crisis. Not only did that unfortunate episode affect the quality of life of Ghanaians, it also led to the collapse of many businesses.
Can Mr Mahama also be reminded that the energy sector legacy debt he left which was threatening the financial health of the country has not been forgotten. The mess in most of the energy sector SOEs which he supervised and the unconscionable take or pay IPPs he happily signed have lingered on till today. The banking sector that the Bank of Ghana’s report in 2015 indicated was in dire state and required liquidity support and restructuring was never attended to by Mr. Mahama. The energy sector and related legacy debts of Mr. Mahama still remains an unprecedented and most expensive in our economic history.
Maybe Mr. Mahama has forgotten how his 2012 fiscal indiscipline messed the economy up to the point that the government lost credibility to the extent that it had no option but to go the IMF in 2015. Among others, the ECF agreement stated at that time that massive fiscal and debt unsustainable, coupled with weak BoP meant that the government was not going to finance itself but with an IMF Programme. Ghana’s international reserves plummeted to a little, under a month of import cover during the watch of Mr. Mahama. Clearly, the NDC and Mr. Mahama have no moral right to question the credentials of the NPP and Nana Akufo Addo.
Now, let me delve into some of the things Mr. Mahama raised. Mr. Mahama talked but GDP growth. It is important he takes note of the fact that if the NPP in 2017 upon assuming office had not worked hard, the growth of 8.1% will not have happened. In 2018, even of the back of massive energy sector contingent liabilities Mr. Mahama left, the economy grew at 6.2%. In 2019, the economy further grew to a high of 6.5%. Mr. Mahama indicated that the economy in 2020 recorded zero growth. It is not true. In the face of COVID-19, Ghana’s economy still grew at 0.5% in 2020 at the time many countries witnessed massive contraction. What is even stellar is that post COVID-19, in 2021, the economy rebounded and grew at 5.4% before contracting to 3.7% in 2022 when other global headwinds aggravated.
On eurobonds, it is surprising that Mr. Mahama is able to speak happily about it. Beyond the principal repayments on the eurobond, Mr. Mahama should also talk about the interest cost that government had to pay on yearly basis. Let me remind him that the most expensive Eurobond even with partial risk guarantee was the 2015 bond secured at 10.75% by Mr. Maham and Seth Terpker. This rate is unacceptable and unprecedented in our history. Through the active liability management progromme of this government, all coupons plus the soft amortizing eurobonds borrowed by Mr. Mahama were always paid until 19th December 2022 when government suspended debt service payments. How can you saddle a country with such high bond cost and turn round to say you did well?
Central Bank overdrafts are not things of recent. During Mr. Mahama’s term in office, the Bank of Ghana gave overdraft every year to the government. The sad thing was that they were not paid back, but were converted into non-marketable bonds. It was the NPP that instituted zero financing policy and ensured it never borrowed from the Bank from 2017 to 2020, during the Covid-19 when the government undertook an Asset Purchase Programme with the Central Bank. It is undeniable that the NDC was never prudent and cared less about monetary prudence as well as fiscal rectitude. It was the NPP that enacted the Fiscal Responsibility Act which capped deficit under 5% of GDP. Mahama, clearly, has forgotten because as he said “Ghanaians have short memories.” Fortunately, many of us have not forgotten the recklessness that took place under his watch.
The Ghana Infrastructure Investment Fund (GIIF) that Mr. Mahama created with support from development partners like Germany was heavily underfunded when the NPP came to power. Infact, they had not been able to fund a single project when we came to power. Today, GIIF has dedicated funding source plus other sources the government deems it fit. The potential of GIIF was envisioned and birthed under our watch. Today, a Ghana Development Bank has also been established to support development Interventions in Ghana. If such bold steps by the then Finance Minister, Hon. Ken Ofori Atta is seen as incompetence, then such a person has a problem.
