The Minority in Parliament says the mid-year review and supplementary budget statement of the National Democratic Congress (NDC) presented to Parliament last week was full of “naked falsehood, hypocrisy, pedestrian propaganda and disingenuous claims”.
Virtually calling the ruling party and the Minister for Finance and Economic Planning, Dr. Kwabena Duffuor, liars at a news conference in Accra yesterday, the Minority said the Minister’s ‘budget presentation was fictional’ and full of half-truths, as he painted two different pictures to Ghanaians and the International Monetary Fund (IMF) about the economy.
In March 2009, when Dr. Duffuor presented the budget statement and economic policy of government, he gave the impression that the NDC administration inherited an economy in a “predicament” in which “all the targets set by the NPP government in 2008 were missed”.
Again, in presenting the mid-year review and the supplementary budget to Parliament just last month on August 25, the Finance Minister indicated that the NDC administration inherited “a run-down economy” from the NPP.
However Minority Leader, Osei Kyei-Mensah-Bonsu, said the Finance and Economic Planning Minister had not been truthful since March this year with Ghanaians about the true state of the economy, adding that, “He has been consistently providing falsehood and half-truths when it suits him”.
Flanked by the former Minister of State at the Ministry of Finance and Economic Planning and MP for Old Tafo, Dr. Anthony Akoto Osei; Minority Chief Whip, Fredrick Opare-Ansah and other Minority MPs, Osei Kyei-Mensah-Bonsu, in what has been described as a complete hypocrisy, inconsistencies and dishonest claims by the ruling NDC, reminded Ghanaians that in a letter to the IMF, Dr. Duffuor said, “Real GDP growth increased steadily from 3.7 per cent to 7.3 per cent in 2008.
“This growth was fostered by significant debt relief which provided the country with fiscal space to embark on critical infrastructure investments, particularly in the energy and road sectors, as well as targeted social spending, all under the Ghana Poverty Reduction Strategy (GPRS).
The combination of higher output, declining inflation, and improved social spending under the GPRS framework contributed significantly to lower poverty levels”. Dr. Duffuor added that the national incidence of poverty declined from 39.5 per cent in 1998/99 to 28.5 per cent in 2005/06.
In the face of the report to the IMF, which also added among others that, “In the health sector, there have been progressive improvements in the delivery of a number of import inputs….the introduction of a pre-paid National Health Insurance Scheme in 2004; and the introduction of free maternal care for expectant mothers.
These together have put health care within the reach of the poor and vulnerable groups”, Osei Kyei-Mensah-Bonsu dared Dr. Duffuor to honestly tell Ghanaians whether these were indicators of a run-down economy.
He said the Finance Minister was even more challenged to come out with the whole truth about the Ghanaian economy especially when he stated further that, “In the financial sector, important structural institutional reforms have also been undertaken recently.
In particular, a comprehensive legal and regulatory framework and strengthened risk-based prudential supervision policies have been put in place to further deepen the financial sector, and safeguard the safety and soundness of the financial systems”.
Pointing out that these statements were not from an NPP propagandist but “from the Minister of Finance who is an honourable man”, Hon. Kyei-Mensah-Bonsu further challenged Dr. Duffuor to tell Ghanaians if he misreported to the IMF about the good bill of health on the country’s economy as he did when he was the Governor of Bank of Ghana, making Ghana pay, in 2001, millions of dollars as penalty for misreporting.
Commenting further on the supplementary budget, Kyei-Mensah-Bonsu said the statement was so misleading and completely disingenuous.
In the mid-year review, Dr. Duffuor stated that the, “Provisional data for the first half-year indicated that both revenue and expenditure were below their budget targets”, adding that, “Consequently, the fiscal deficit including divestiture receipts was GH¢965.4million, equivalent to 4.5 per cent of GDP.
This compares with a targeted deficit of GH¢1,400.5million equivalent to 6.5 per cent GDP”.
Pointing out what the Minority described as inconsistencies, Kyei-Mensah-Bonus recalled the Finance Minister saying the NDC inherited “an overall budget deficit of 14.5 percent of GDP”.
The huge deficit did not include expenditure arrears and commitments, which are currently estimated at about GH¢1.7billion equivalent to 9.7 per cent of GDP for 2008.
In March however, the Minister had stated that the overall deficit was equivalent to 14.9 of GDP, compelling the Minority Leader to ask, “Which figure is right, 14.9 percent or 14.5 percent”?
The Minority Leader further pointed out to Dr. Duffuor that, “When he was calculating the deficit for June 2009 under the NDC government, we noted that he conveniently included divestiture, but excluded arrears and commitments. But in calculating the deficit for 2008, under the NPP Government, he conveniently excluded divestiture receipts and rather conveniently included arrears and commitments”.
Comparing the records of the previous administrations of the NDC and the NPP, Kyei-Mensah-Bonsu, who is also the MP for Suame, Kumasi in the Ashanti Region, emphasized that in 2000 when the NDC Government completed its term of office, inflation stood at 41 per cent as compared to 18 per cent when the NPP left office in 2008.
“In 2000, when the NDC Government was leaving office, the total debt to GDP ratio stood at 186 per cent, meaning that we needed almost two of our national incomes to pay off all our national debt.
But in 2008, when the NPP Government was about to leave office, the total debt to GDP ratio stood at only 46 per cent, meaning we needed less than one-half of our income to pay off all our debts.
“Again, in the year 2000 the cedi depreciated by 50 per cent, whilst in 2008, it depreciated by 22 per cent; in 2000, lending rates were around 50 per cent but in 2008, lending rates had dropped significantly to around 27 per cent.
When the NDC Government left office in 2000, they left a meager reserves of $236million whilst the NPP Government left reserves to the tune of $2.036billion, almost ten times that of the NDC Government, enough to provide import cover for 9 weeks whereas at the exit of the NDC, the import cover was for two weeks”, Minority Leader pointed out.
He indicated that in 2000, “If we shared all our total income among the population, each Ghanaian would have gotten only $290, whilst in 2008 each Ghanaian would have received at least $712, about two and half times as we did in 2000”. He asked Ghanaians to judge for themselves which economy, that of the NDC 2000, or NPP 2008, was run-down.
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