Interesting but acrimonious debate ensued yesterday in Parliament on the President’s ‘State of the Nation’ address, with the state of the economy under the previous National Democratic Congress (NDC) government and the first New Patriotic Party (NPP) regime coming under the spotlight.
The nation’s GH¢122 debt stock, which President Akufo-Addo said was strangulating the economy and the GH¢7 billion ‘hidden’ arrears by the previous government, which was later ‘uncovered’ by current government, became bone of contention, with members from both sides blaming each other for the situation.
Moving the motion to kick-start the debate, the NPP MP for Wenchi, who is also the Minister for Planning, Prof George Gyan-Baffour, said that the debt situation bequeathed to the NPP government is very debilitating and that this year alone the NPP government will have to cough up GH¢14 billion for the servicing of the debt for the year under review.
He said after paying its fixed and quasi fixed obligations such as wages and statutory payments, huge interest payments, resulting from the accumulation of huge debt by the previous government, will leave the national coffers with virtually nothing for discretionary expenditure on programmes and projects needed to grow the economy.
“Mr Speaker, as rightly said by the President, in 2017, these three major expenditure lines will consume 99.6% of all that is in the national coffers.”
According to the Wenchi MP, the NPP, with its experienced economic team, will adopt an innovative way of managing the economy to get the country out of the economic mess the NDC has plunged the country into, stressing that the Finance Minister will be in the House on Thursday to present the maiden budget of the NPP under President Akufo-Addo, which will unveil the plans of the government to tackle the economic mess.
He said the government is also very much committed to its campaign promise of ‘one district, one factory’ policy to help create jobs for the teeming unemployed youth.
“One of the short-term measures to create jobs include the provision of stimulus package to prop up distressed but viable businesses to expand their operations and increase employment,” he said, stressing that in the long-term, jobs would be created through the development of strategic industries such as the establishment of heavy industries in pharmaceuticals, iron and steel, integrated aluminum industry, vehicle assembly plants and the production of salt and its derivatives and other light industries in garment and textiles.
He said to ameliorate the energy crisis, the President indicated the possibility of listing the VRA and GRIDCO on the stock exchange and encourage private sector participation in the sector, particularly in solar and wind energy.
“Mr Speaker, listening to the President it has become quite obvious that His Excellency Nana Akufo-Addo is, indeed, prepared to deal headlong and resolve once and for all the ever present youth unemployment problems in the country.”
The ranking member of the Finance Committee and NDC MP for Ajumako/Enyan/Essiam, Ato Forson, who seconded the motion, said that the NDC government performed far better than the previous NPP government in terms of economic growth, indicating further that NDC government achieved the highest Gross Domestic Product (GDP) growth of 14% in 2011 and that the average real GDP growth under NDC was 6.8% while the average GDP growth was 5.6% under the previous NPP government.
The ranking member of Finance also said the President’s information on the debt stock of the country was not accurate, stressing that going by the current exchange rate the nation’s debt of $8.075 billion as of December, 2008 would be GH¢34.72 billion in 2016 and that over the eight year period that the NDC was in government it borrowed $20 billion, which translates into GH¢87 billion and not the GH¢112 billion said to have been contracted by the NDC government.
Hon Ato Forson also indicated that because of the sound economic policies put in place by the NDC, inflation has started declining.
“Since the last quarter of 2016, inflation has been on a steady decline falling to 13.3% in January, 2017 from 15.4% in December, 2016,” he said, stressing that in December 2008 when the previous NPP government was exiting power inflation was at 18%.
On his part, the chairman of the Finance Committee and NPP MP for New Juaben South, Dr Mark Assibey-Yeboah, asked his colleagues from the minority to stop their ‘voodoo economics’ on the real debt stock of the country.
He explained that the method used by the minority to calculate the real debt of the country was completely not in line with the economic reality of the day.
He said the Minority cannot lump all the loans contracted over the eight-year period and use today’s exchange rate to do their conversion.
He said loan contracted in each year should be calculated in that year’s prevailing exchange rate and should be treated on its own merit, otherwise it would be a mischievous way of doing the conversion and calculation of the debt portfolio of the country.
The former Minister of Petroleum and NDC MP for Ellembelle, Emmanuel Armah Kofi Buah, on his part, wondered why the government had decided to put VRA and GRIDCO on the stock exchange, explaining that the government wants to privatize those strategic energy companies.
He said the picture painted by the President that the NDC government left a debt of $2.4 billion in the energy sector was wrong because it was a debt accumulated over the last 20 years by all the previous governments and that the debt came as a result of subsidies the government put on petrol, kerosene, LPG and gas oil.
He said the debt was compounded by the failure of the various ministries, departments and agencies to pay their electricity bills.
According to him, as a result, the previous NDC government introduced the energy sector levy in December, 2015 to clear the huge accumulated debt.
He indicated that in 2016, the levy fetched the nation GH¢350 million out of it GH¢250 million was used to restructure the debt in the energy sector.
Debate on the ‘State of the Nation’ address continues today.
By Thomas Fosu Jnr