“Prudent economic management has been defeated since 2019” …Prof Gatsi

The Dean of the School of Finance of the University of Cape-Coast, Prof. John Gatsi, has pronounced the Akufo-Addo government guilty of self-aggrandizement over the administration’s constant claim that it is managing the economy well despite spiraling debt from borrowing and hardships in the country.

In a write-up Prof. Gatsi lamented the applause that the government keeps giving itself, saying it insults the intelligence of the average Ghanaian who is living with the reality of economic hardships daily.

Based on what he said were the facts on the ground, the government’s claim that it is prudently managing the economy is simply untrue.

“Prudent economic management has been defeated since 2019,” Prof. Gatsi wrote.

He points out that the country’s rising debt is proof of the fact that the economy is being managed poorly and so the government’s claims that the economy is improving in spite of rising debt does not stand to reason.

“This theory of prudent economic management is rising with rising debt is unfortunate and unsupported by any data. Data from 2019 as captured in the 2021 IMF Article IV Consultation report on Ghana, shows a deficit of 7.5% in 2019 just a year after the celebration of the passage of the Fiscal Responsibility Act which pegged the deficit at 5%. In the same report, the debt situation has been described as nearing potential risk of default within the framework of high risk of debt distress,” he wrote.

He added that labour agitation based on a firm socioeconomic argument is one of the signs of an unmet economic objective.

Ghana’s debt has ballooned to Ghc332billion and still rising. 

The International Monetary Fund (IMF) has forecast that the debt to GDP ratio will hit 81.5% by the end of this year. The revelation was made in the Fund’s April 2021 Fiscal Monitor.

Amidst the spiraling debt, there is joblessness and labor agitation while the local currency, the cedi keeps losing value against major trading currencies, especially the dollar.

Yet despite this, the government has been claiming that it is managing the economy well.

Vice President Mahamudu Bawumia, in a rather curious analysis in an even recently inferred that the runaway debt levels were a sign of “prudent” economic management.

“The demand for accountability, debt transparency and the essence of economic management should be discussed truthfully and with due respect to Ghanaians,” Prof. Gatsi wrote, adding, “ The question that managers of the economy should ask themselves or their audience is whether or not they are happy with public assistance in this country. Ghanaians want to be asked if they are happy about employment and livelihood matters.”

According to him, “an objective observation of the economic management outcomes of the Ghanaian economy especially during the period of high debt, does not deserve any clapping for managers of the economy. This is the time the managers must be humble and assure citizens. Claiming prudence in failure to deliver on the requirements of the economic objectives for Ghana is dangerous and insulting.”

The Dean of the UCC School of Finance pointed out that Economic development is markedly different from intermittent economic growth and is different from lower inflation generated as a result of changing base period of the Consumer Price Index.