Good afternoon ladies and gentlemen. Let me begin by thanking Mr. Seth Terkper for his delivery, which has brought home a number of key issues surrounding our recent economic trajectory. I do not intend to belabor the points he has made, except to reinforce few of them. I am a historian at heart, so I like to look at these things from a historical perspective in order to give context to what we are witnessing today. Much has been made of the impact of Covid-19 on the Ghanaian economy.
The truth, however, is that our economic history has over the last few decades, been characterized by booms and bursts, dictated by both domestic and external factors. Since the days of President Jerry John Rawlings and even before then, these shocks have cyclically derailed incremental progress made over the years. The older generation would recall how bush fires and droughts in the early 80s plunged the Ghanaian economy into crisis, leading to lengthy periods of negative growth and very high inflation.
By dint of hard work and skillful management, the PNDC government managed to salvage the economy and brought back sustained positive economic growth until this, was again, undermined by falling commodity prices, which led to dwindling export revenues in the late 90s. When the Kufour administration took over, we went to HIPC in order to secure debt relief. Up to $3.8 billion of our debt was written off and this offered significant fiscal space. At this period too, there was a transition in the structure of the economy from one led by agriculture to one led by the service sector.
In the latter years of President John Agyekum Kufour’s administration, we discovered oil in commercial quantities, and we joined the league of oil producing countries. A global financial crisis reared its head around this time, and this also impacted our economy negatively. In came the Mills administration, under which I had the privilege of serving as Vice President and Head of the Economic Management Team. We, in turn inherited a large budget deficit and huge arrears as well as a depreciating currency.
Many people tend to overlook the fact that it was during this era that Ghana recorded its most prosperous period of economic management. We had the highest levels of economic growth before oil production kicked in. For instance, in 2010, we grew at 8% without oil and at 14.4% with oil in 2011, the highest in 40 years. Non-oil growth for that year was 8.4%. The following year, 2012, we grew by 9.3%. We achieved the longest sustained period of single-digit inflation of 33 months, among several other notable milestones. The cyclical shocks came back with a vengeance between 2013 and 2016. These included problems with power production when unreliable gas supplies and frequent breakdown of power generation equipment resulted in a protracted power crisis that severely affected our economy.
This was compounded by huge revenue shortfalls in the oil sector because of lower-than-expected production from our only oil field at the time. When confronted with these challenges, we put in real effort to address them comprehensively and laid down critical structures that today, have become some of the most important pillars supporting the Ghanaian economy.
When we inherited the oil economy in 2009, we put in place the necessary mechanisms and institutional arrangements to ensure that we derived maximum benefit. We passed the PRMA under which we set up the Stabilization and Heritage Funds with about $500 million in them at the time we left power in 2017. We tackled the power crisis too head-on and by the time we left office in January 2017, we had sufficient generation capacity to withstand future shocks. We brought stability and reliability to fuel supply for power generation when we built the Atuabo Gas plant to process gas. We set up ESLA, which by 2024 should have yielded up to GHS 40 billion.
This stands us in good stead to overcome the stifling legacy debts in the energy sector and help address the liquidity challenges in the sector. We set up the Ghana Infrastructure and Investment Fund (GIIF) to mobilize capital, to undertake major infrastructure projects and one of its first success stories is Terminal 3 at the Kotoka International Airport.
We also established the Ghana Exim Bank to promote trade and commerce within the Ghanaian economy. We had the Sinking Fund, which is a mechanism through which we would set aside funds to retire maturing debt. As of 2016, we had saved up to $550 million to pay off the first sovereign bond floated under President Kufour. We had the contingency fund from which we found money to underwrite the relief effort in the aftermath of the June 3rd Disaster.
We did all of these alongside massive investments in capital projects with the view to accelerating our economic development. We ensured that we kept our public debt within manageable limits with debt amounting to 56% of GDP. We also brought down the rate of accumulation of debt as has been vividly demonstrated by Seth Terkper in his presentation. It became necessary in 2014, to partner with the IMF, in order to achieve more success implementing the Home- Grown policies that we had crafted as a response to the economic turbulence resulting from the shocks I have spoken about. This was the 16th time we were seeking assistance from the IMF as a nation, though our opponents at the time made it sound as though it was novel and anathema.
I made the point then, that it was to be our last resort to the IMF, because I was confident that having the programme straddle three years, though we had two years left on our mandate, was going to ensure that a succeeding government had the opportunity to continue where we left off and do the things that would make subsequent programmes completely unnecessary. It is noteworthy, that the programme was extended by another year by the Akufo-Addo administration, and they received in excess of $300million, which was the final tranche of the Extended Credit Facility that came with the programme.
I am on record to have predicted in November, 2016 that, due to the work we had done to overcome the economic headwinds and the coming on stream of two additional oil fields, economic growth will go past 7% in 2017 and beyond. This was confirmed by the World Bank and IMF, predicting growth above 8% for the same period. Additional oil revenue, a resolved energy crisis paving way for more and sustainable generation of power, and sound implementation of our homegrown policies were going to make life comfortable for the new government after 2017.
Despite these favourable conditions, most of the gains we made and bequeathed to this government have been eroded and we have been plunged into further economic crisis. Covid-19 has become the convenient whipping boy and has been cited as the reason for the crisis we face now and the attendant economic hardships. 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.
Covid-19 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 a 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. They have benefitted from 60% of all the oil revenue accruing to Ghana since we began producing oil,
they have had more than twice the total tax revenue available to us and have enjoyed unprecedented support from our development partners. Within a space of 12 months, they have received up to GHS11 billion from the IMF alone and over $200 million from the World Bank and other donors. They had access to over $200 million from the Stabilization Fund we set up and got Central Bank Financing of GHS10 billion whereas we had zero financing from the Central bank in 2016 despite all our challenges. They have also increased our debt by almost twice the total amount of all previous governments put together
All of this notwithstanding, they have the least to show in terms of tangible gains or capital investments. Another major problem has been the unprecedented levels of corruption and the total lack of accountability and prudence in the handling of the public purse. According to the Auditor General, financial irregularities within the public sector shot up from about GHS700 million in 2016 to GHS12 billion in 2020. This level of leakage will definitely affect the ability of any government to deliver on its mandate and guarantee citizens an appreciable standard of living. The nonchalance and total unwillingness to address corruption in government is a major worry and will continue to affect our economic fortunes until the trend stops.
When I called for a change in government in 2024 as the first step towards halting this hemorrhage of badly needed resources through corruption and holding offending officials to account, our friends in government took offence but it remains the only viable way to save the public purse in the face of abundant evidence that nothing will be done about the situation. Today, we have heard a lot of numbers and these numbers tell a story. We, politicians, like to recite them with aplomb, believing that they show our superior performance.
Our people have often questioned the relevance and importance of these numbers by retorting that they do not reflect in their lives or pockets. They are justified in demanding a correlation between the numbers we boast about and improvements in their lives. To what extent have we been able to offer a tangible link between the talk about stable inflation and our people actually going to the market and finding that prices have remained the same over an extended period of time? Our people are just galled by the hypocrisy of so-called economic experts in 2016, asking them to forget about economic statistics and look at the escalation of prices of cement and other products on the market, and then today have the same experts in government hold-up statistics, inflation, etc., and say that life is better for them. And that the perception of hardship in Ghana is a creation of Mahama. This is a conundrum for us all. How have we all ensured that when we have touted high economic numbers, it finds expression in the number of jobs created within the economy to guarantee our teeming youth a dignified existence within which they are able to meet their needs and those of their dependents? How has economic growth led to actual growth in the lives of our people? We are at a juncture where these questions have become even more critical. Despondency, disillusionment, and frustration over unmet expectations and our collective inability over the years to translate economic numbers into tangible outcomes and improvements in the living conditions of our people, are casting an ominous pall over the enthusiasm that greeted the democratic transition decades ago. Our people are beginning to question, whether this whole democratic effort is not only a ruse to grant access to the resources of a country to a few privileged elites to do as they please with it and satisfy their creature comforts to the detriment of the masses who should be the ultimate beneficiaries. The much-heralded democratic dividend is fast turning into a mirage far beyond the reach of the people for whom it was intended. There can be no denial of the fact that Ghana is caught in the throes of deep socio-economic problems
. Mounting unemployment, affecting millions of our youth, ever-declining quality of education, problems with healthcare and agriculture, decaying infrastructure, corruption, weakening and politicization of state institutions, insecurity, and unreliable public services continue to make life very difficult for the average Ghanaian. The speed with which hundreds of thousands of young people, spontaneously took over social media and demanded that this country be fixed, is a cautionary tale on how exactly the people feel about the way this county is being governed.
Rather than cynically scoffing at these calls, ascribing political motives to them, and pretending that the genuine cry for help from our citizens is the figment of the imagination of some political leaders, we should be lending a listening ear to these young people and indeed, the general population. The problems facing our country and the solutions to them cannot be reduced to a handful of fancy slogans and poorly conceived and implemented half-measures, aimed at obtaining short-lived political gratification only to have them inflict deeper socio-economic wounds on our country and leave more problems than they resolve. Governance is not about empty sloganeering and PR stunts.
It should be about methodical steps that are well-conceived and thought through to address our problems holistically and permanently. It should be about crafting and rolling out a vision that transforms society in meaningful ways which clearly benefits all our people. The seemingly intractable problems we face and the vicious cycle they continue to perpetuate should compel us to create room for more consultation and deliberation among competing political forces and ideologies as we demonstrated when we convened the Senchi economic forum leading to the formulation of the Senchi Consensus. Sitting with political opponents to find common ground and thinking through national problems is not an admission of defeat nor helplessness. It is a demonstration of maturity and statesmanship, oozing out of a shared desire to see our nation progress irrespective of the colour of those who govern at a particular point in time.
Those who govern are but temporary employees of the people of Ghana. They will change from time to time depending on the mood of the electorate, but our country must progress no matter who goes into or comes out of government. We in the NDC stand prepared to engage in fruitful national dialogue aimed at finding concrete solutions to our most pressing problems. Polarization, extreme partisanship, and the zero-sum approach to governance only serve to hurt our people more. The clock is ticking, and our people are watching, rather impatiently I must add, to see if we will course-correct and adjust to their demands and begin to drive a new narrative and paradigm, that prioritizes working in their collective interest and delivering measurable results that enhance their welfare and resolve .