Member of Parliament for Bolgatanga Central Constituency, Isaac Adongo has dismissed claims by Vice President, Dr. Mahamudu Bawumia that the Akufo-Addo’s government has efficiently managed the country’s public debt stock.
Dr. Bawumia, speaking at a regional seminar of the Tertiary Students Confederacy of the NPP (TESCON) at the University of Cape Coast on Saturday, touted the government’s management of the economy particularly the public debt as efficient.
He said although the debt levels have increased astronomically, economic indicators such as the exchange rate depreciation, interest rate, inflation rate and GDP growth have performed incredibly well. This, he stated, is as result of prudent management of the country’s public debt, arguing that such economic indicators would not have performed well if the debt was poorly managed.
But Mr. Adongo, in a statement, described the Vice President’s claims as an absurd attempt to justify what he said is the mess the Vice President who is the leader of the Economic Management Team has created in managing the country’s economy.
“I have watched a video of Dr. Mahamudu Bawumia at a TESCON Program at UCC trying so hard in an absurd manner to justify the mess he has run Ghana’s Economy into, in a similar fashion to his ill-fated attempt to run away from his technically deficient analysis of exchange rates developments and the fundamentals of the economy,” he stated.
He contended that the International Monetary Fund (IMF) classification of Ghana as a high-risk debt distress country is an indication that the country’s debt levels have not been properly managed as claimed by the Vice President and could not have achieved the economic variables the Vice President mentioned.
Mr. Adongo believes the positive outlook of some of the economic indicators particularly the exchange rate depreciation is as result of the Covid-19 pandemic which slowed down business activities and not the management of the economic.
He accused the Vice President of dishonesty for attributing the “Covid-19 induced” stability of the exchange rate depreciation to prudent management of the economy but conveniently blaming the low economic growth on the pandemic.
“When Covid-19 struck, forex demand pressures reduced significantly because Ghanaians are not importing due to lockdown etc., leading to relatively lower demand for the dollar. The exchange rate became stable as a result and Dr. Bawumia attributed this Covid-19 induced stability to what he described as prudent economic management but dishonestly refuses to accept that the same prudent economic management should be blamed for the 0.4% growth of the economy in 2020. This is the height of dishonesty,” he said.
Mr. Adongo added “real practice over the last couple of years, has exposed Dr. Bawumia’s lack of appreciation and technical deficiency in risk-based public debt management. Hence his consistent recourse to rate of debt accumulation and debt to GDP, even though important, are intermediate variables to measure the performance of risk-based debt management.
Dr. Bawumia is cunningly misleading people to engage in a less important variable of debt sustainability and risks of debt dynamics to the neglect of major drivers of quality of public debt and their impact on debt sustainability, fiscal risks and external vulnerabilities.
For example, what is the relevance to debt sustainability and fiscal risk if you claim that the NDC recorded 200% debt accumulation and NPP 60% rate of accumulation but the NDC only used 56% of tax revenue to service that debt with 44% fiscal space to fund the budget whilst the NPP with less rate of accumulation uses 91% of tax revenues to service public debt with only 9% left to fund the budget as in 2021?”
For him “Whilst Ghana continue to be in the hands of a clueless Dr. Bawumia, his continuous display of ignorance and lack of appreciation of the risks facing the country, we must pray and seek spiritual support to rescue him from the ‘demons and principalities’”.
