Mahamudu Bawumia, Vice Presidential Candidate of the New Patriotic Party, has cautioned Ghanaians about the debilitating economic harm that will be done to the nation, and their lives, if President John Dramani Mahama is given another term to continue his mismanagement of the affairs of the country.
He is therefore urging the electorate to truncate the continuous harm being done to the economy by ensuring that President Mahama’s term of office is truncated when the nation goes to the polls on December 7.
Dr Bawumia, who was delivering a lecture on “The State of the Ghanaian Economy – A Foundation of Concrete or Straw” at the National Theatre yesterday, observed that even though the NDC government had received more resources than any government ever in the history of the country, available data on economy show that the years under President John Mahama had seen the worst performance of the economy since the dawn of this century.
Virtually every single economic indicator proves that while the eight years under the NPP, between 2001 to 2008, were better than these last eight years under the NDC, the NDC’s first four years under the late President Mills was even far better than these last four years under John Mahama, according to Dr Bawumia.
He explained that any assessment of the state of the economy and the performance of the government must be done against the background of the resources at its disposal.
Indeed, at a public lecture in September 2008, then Vice Presidential candidate John Mahama said: “To whom much is given much is expected.”
“Under the 8 years of the NPP government, from 2001-2008, taxes and loans amounted to GH¢20 billion. In contrast, taxes, oil revenue, and loans alone over the 8-year period of 2009-2016 would amount to some GH¢248billion. The Mills-Mahama governments would have had in eight years, more than 12 times the nominal resources that the NPP had,” he said.
In terms of GDP Growth, Dr Bawumia disclosed that without oil, the NPP competently managed the economy to increase growth from 3.7% in 2000 to 9.1% in 2008 while with oil and unprecedented resources, economic growth had declined to 3.9% in 2015.
“Between December 2000 and December 2008, without oil, economic growth increased from 3.7% to 9.1%. After declining to 4.8% in 2009, real GDP growth increased to 7.7% in 2010 and 14% in 2011 following the onset of oil production. Since 2011 however, real GDP growth has declined steadily and drastically to 3.9% in 2015, basically the growth rate Ghana attained in the year 2000.
Between 2000 and 2008, the size of Ghana’s economy increased from some $5.1 billion to $28.5 billion, a 459% increase in eight years (Figure 3). Even in the face of a global economic and financial crisis in 2007/8 (with oil prices reaching a record high of $147/barrel), economic growth in 2008 rose to 9.1%. Ghana’s GDP, notwithstanding the discovery of oil, has only increased from $28.5 billion in 2008 to a projected $40 billion in 2016 (a 40% increase in eight years). However, between 2012 and 2016 i.e. during John Mahama’s tenure as president, the economy, in dollar terms, shrunk by 5%.”
Dr Bawumia further explained that under President Mahama, the country’s Per Capita income had amazingly declined by 12% despite all the opportunities the government had to improve it.
“Under the NDC, GDP per capita has recorded a growth of 17% (from $1,266 to a projected $1,481) with oil revenue. Under John Mahama’s tenure as president (2012-2016), GDP per capita has declined by 12%. Under NPP on the other hand, GDP per capita recorded a growth of 187% in 8 years (from $440 to $1,266) without oil revenues. While the NPP increased per capita incomes by $826 during its term, the NDC, with twelve times more resources, has increased per capita incomes by only $215. With twelve times less resources, the NPP increased GDP per capita by some four times more than the NDC. This is essentially the difference between competent economic management and incompetent economic management. It also tells us that fundamentally, Ghana’s problem is not about resources. Our problem is the efficient and honest management of our resources,” he said.
He again disclosed that under the tenure of President Mahama, the Minimum Wage had declined by some 23.6% while, in all, it had declined by 4% in dollar terms under the eight years of the NDC government.
“In dollar terms, under the NDC, the minimum wage declined from $2.12 to $2.02 by 2016 (i.e. by 4.6%). Between 2012 and 2016 (during the tenure of President Mahama) the minimum wage in dollar terms declined by 23.6%! In comparison, the NPP increased the minimum wage from the equivalent of $0.62 in 2000 to $2.12 in 2008 (i.e. by 244%)”
The NPP Running Mate noted that for the first time in Ghana’s history, it had recorded three consecutive years of double digit deficits, occasioned by reckless spending.
“At the heart of Ghana’s current economic difficulties is the government’s reckless management of public finances, especially in the run up to the 2012 elections, over which John Mahama presided as President. We should recall that the economy ended in 2012 with a fiscal deficit of 12.2% of GDP, 11.7% of GDP in 2013 and 11.9% of GDP in 2014. This was the first time in Ghana’s history that double digit fiscal deficits were recorded for three consecutive years (and this occurred under John Mahama’s presidency)”, he said.
In the view of Dr Bawumia, another critical area which underlines the incompetence of President Mahama’s administration is the unprecedented borrowing.
“In the last seven years alone under this NDC government, Ghana’s total debt has ballooned from GH¢9.5 billion to GH¢100 billion by the end of 2015 and GH¢105 billion in May 2016. Some 66% of Ghana’s debt, GH¢69 billion of it, has been accumulated under the presidency of John Dramani Mahama in just last three and a half years,” he noted.
Dr Bawumia reiterated that in terms of economic performance, the Mahama government has been the worst in the history of the country, adding that it was therefore time for change to salvage the country and its economy.
He summed it all up: “The fact is that the worst period of economic performance since 2001 has been under President Mahama’s stewardship between 2012 and 2016. The truth is that the foundation was already laid by the Kufuor government. President Mahama has spent the last eight years destroying this foundation; replacing it rather with a weak foundation of straw which he desperately tries to portray it as one of concrete. A mason who inherits a good foundation and spends eight years destroying it cannot be trusted to build the house. We need a competent mason, one with integrity, credibility and vision to build the house.”