GhanaWeb

Economists find 4 govt claims on economy false and misleading

Economists find 4 govt claims on economy false and misleading
The Ghana Economic Dialogue (GED), a group of development-focused Ghanaian economists and other professionals has analyzed some claims that the Akufo-Addo-led government made in its 2020 manifesto and has found four of them to be either false or misleading.

According GED, it will engage in a continuous scrutiny and analysis of the manifesto promises by the two dominant parties, to help voters appreciate the nuances of each manifesto and to help them make the relevant decisions ahead of the general elections.

GED also promises to “help ascertain credibility of the economic data, clarify the contents and claims made in the manifestos and, by extension, determine the superiority and potential ability of either party to execute the promises laid out in the manifestos”.

In this episode titled “Tracking the political party manifesto promises” , GED found that the NPP’s claims on the overall macro-economic stability, primary surplus, declining economic growth and the claim on government borrowing, are all false.

Below are the findings of GED on each claim;

NPP’s claim on overall macro-economic stability and GED’s finding:

The fiscal deficit declined from 6.8 per cent of rebased GDP in 2016 to 3.8 per cent in 2018 and ended at 4.8 per cent in 2019.

Contrary to the NPP’s claims, GED found that, in 2018, the fiscal deficit was rather 7.0 percent, moved to 7.5 percent in 2019 and is projected to close 2020 at 11.4 percent. The figures are corroborated by the April 2020 Report of the IMF and World Bank. The NPP’s manifesto claims are therefore inaccurate and false.

NPP’s claim on primary surplus and GED’s finding:

The NPP claimed in its manifesto that the government recorded a primary surplus for three years in a row: 0.5 percent of GDP in 2017, 1.4 percent of GDP in 2018, and 0.9 percent as compared to a deficit of 1.1 percent in 2016.

The GED cross checked all the numbers indicated under this section and found all to be false.

The primary balance, which is an indication of our debt affordability rather recorded deficits in the three years under the watch of the current government. In 2018, the deficit was 1.4 percent. The deficit increased to 1.8 percent in 2019 and is further projected to close the year at 4.1 percent. These indicators are validated by the IMF and the World Bank report.

NPP’s claim on declining economic growth and GED’s finding:

The main challenge faced Ghanaians prior to the NPP assuming the reins of power was declining economic growth. In 2016 the GDP growth rate was 3.6 percent.

The GED found that while the country’s GDP in 2016 was 3.6 percent, a situation which was brought about by declining crude oil prices and other primary commodities on which these sub-Saharan African economies depend, other nations in the region grew between 2.0 and 3.6 percent in the same period. Again, the IMF has projected a gloomy year-end growth rate of 0.9 percent for the country.

NPP’s claim on government borrowing and GED’s finding:

According to the manifesto claim, between 2008 and 2012, Ghana’s debt stock increased by 267 percent and between 2012 and 2016, the increase was 243 percent, whereas the increase from 2016 to 2019 was 76 percent (including one- time financial sector bailout).

Here again, the GED observed that the NPP’s manifesto claim on the rate of borrowing is misleading. In fact, total borrowing was confused with the rate of borrowing. It is imperative to note that the rate of borrowing is the frequency of borrowing while the total percentage of borrowing is benchmarked against a base borrowing figure and therefore could not be termed as a rate of borrowing. Verifiable figures showed that the total percentage of the government’s borrowing is about 110 percent as against the base figure of GHS122 billion inherited from the previous government.

Conclusion:

In many aspects, the GED’s position is that the NPP manifesto on the economy is not reliable. It is worthy of note that as the party in power the NPP should display a lot of honesty and candour. This is especially crucial because, there are dire consequences for the economy hit if our our international partners begin to question the credibility of data presented by the government.

Source: ghanaweb.com

Original Story on: GhanaWeb


Scroll to Top