The former Finance Minister, Seth Terpker, says the Akuffo-Addo government is trying to use the coronavirus pandemic to mask the already deteriorating economy.
Speaking in an interview with Bernard Avle on Citi TV’s The Point of View, Mr. Terkper called on the government to come clean on the distinct stresses on the economy during the mid-year budget presentation, later today.
“I am not downplaying COVID-19. I need to be very clear on this, but I am saying that a lot was happening already [to the economy.”
According to government the pandemic would cost the state over GHS 9 billion and Mr. Terkper, explained that this amount is equivalent to 2 of about 10 percent of Ghana’s budget deficit. The International Monetary Fund had already predicted that Ghana’s budget deficit would be above 7 percent in December 2019. The estimate went up by 2 percent in March 2020.
The former Finance Minister also mentioned that the recent financial support like the $1 billion IMF Rapid Credit Facility to mitigate the impact of the COVID-19 pandemic on Ghana’s economy as contributing to the deficit. He further criticised this particular move by government will eventually lead it back to the IMF, despite the government’s assertions that it has moved beyond the IMF.
Mr Terpker felt that governments return to IMF was too quick given the claims that the economy was being well managed.
“Why did we make a U-turn after we exited the IMF. Exit means that you won’t go to the IMF for a programme. We went to the IMF in March, very early into COVID.”
“The question we should ask is why didn’t other African countries rush to go to the IMF in March and April? According to the government, we had a stronger economy than other African countries and we were comparing ourselves.”
He also pointed out that government is simply using the pandemic as an excuse “to cover the deficit”
“…The gap which I am talking about from Article IV [IMF assessment in December 2019] as a result of the adjustments which you are talking about.”
“If you are going to say the deficit is 10 per cent or 9 per cent, don’t say it is all on account of COVID,” he said.
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I’m Deborah Aba Narkoah. I’m an avid reader, writer and public speaker.
