Former President John Dramani Mahama says the Akufo-Addo led government’s reckless spending and the thirst for consumption expenditure is the cause of the country’s current economic crisis and not the impact of Covid-19.
Speaking at the State of the Economy Forum organized by the NDC pro-forum on Monday, 6 September 2021, the former President said almost all of the country’s tax revenue is used to service debts and the effect has been the introduction of several new taxes.
Mr Mahama said the NPP government must accept that the mismanagement of the economy, and the desire to spend beyond the means of the government in order to win elections have plunged the country into the current crisis.
“Yes, COVID-19 affected the economy, and no one can dispute that. It is however not the main reason why we are in the current hole we find ourselves. COVID19 only became a pretext for reckless election-related spending, which produced the largest-ever budget deficit in the recent economic history of Ghana last year.
“Our debt has ballooned to unsustainable levels- topping 80% of GDP- exposing us to very high risk of debt default. Almost all of our tax revenue is used to service our debt and the effect has been the introduction of several new taxes. This has led to rampant increments in the prices of goods and services.
“This is primarily responsible for the hardships Ghanaians are going through now. A comparison with our neighbours and peers in Sub-Saharan Africa, all of whom were also affected by COVID-19, shows they have been able to protect their citizens from COVID-19 in ways that are similar to ours. They have however avoided increasing their debts and deficits because of more prudent management of their economies.
“This government must accept that it is their mismanagement of the economy, their thirst for consumption expenditure and the desire to spend beyond our means in order to win elections that have plunged us into the current crisis, not necessarily COVID-19. This has been the luckiest government under the fourth republic.”