Dr Mark Assibey Yeboah, former MP for New Juaben South, claims that government spending during the Covid-19 pandemic contributed to the country’s current economic crisis.
According to him, the government’s spending went through the roof because they implemented measures to protect the populace during the pandemic.
Dr. Yeboah stated on Citi TV that “with all the free things that we enjoyed, government spending went through the roof, the free water, electricity, cooked meals, covid support, and everything that was given out.”
He explained that, despite the fact that the Fiscal Responsibility Act prohibited the government from spending above a certain threshold, they had petitioned Parliament to set that act aside.
The Fiscal Responsibility Act requires that the annual deficit not exceed 5%. But after that, you can put it aside. “The act states that in times of emergency, or in essence when there is a pandemic,” he explained.
He also mentioned that there were slippages that surfaced during the 2020 election.
“If you look at how we managed the pandemic and then the consequences, I don’t think it’s all attributable to the pandemic and then the war,” he said.
Dr. Yeboah was speaking about why the economy began to deteriorate and the government’s decision to seek IMF assistance.
President Akufo-Addo authorized the Minister of Finance to formally engage the IMF for Balance of Payments support about a week ago.
However, the government’s decision to seek financial assistance from the Fund has been met with mixed reactions, with some, particularly members of the National Democratic Congress (NDC), arguing that it is long overdue.
Some have also expressed concern about the impact of the move on public sector jobs and social programs, with organized labor opposing the decision.
He stated that the decision sends a signal to international capital market participants that the country is on track to “fix the mess that we find ourselves in.”
Meanwhile, Dr. Yeboah believes that the avian influenza pandemic and the Ukraine war are not solely to blame for Ghana’s economic woes.
He claimed that prior to the war, the international ratings agency Fitch downgraded Ghana’s Long-Term Foreign-Currency Issuer Default Rating (IDR).
“There was no war when Ghana was downgraded in January, so we should leave the war out.” The advantage of a fund program is that we would have to open our books. So, for example, when the fund arrives, we will be aware of the arrears situation.”