By Amos SAFO
A tug of war between the ruling National Democratic Congress (NDC) and opposition New Patriotic Party (NPP) is raging over the true state of the economy.
Whereas the NDC claims it inherited a weak and mismanaged economy, the NPP insists it left a very robust economy with a strong Gross Domestic Product in 2024.
Soon after assuming office, the Mahama administration announced that it had inherited a weak and “criminally mismanaged economy”, to the extent that it might not be able to deliver most of the promises it made during the 2024 election.
Spokesmen and women of the past government have however, countered that they left a very robust economy, with GDP growth of 7.2 percent. Members of the former government accused the current government of hiding behind a so-called weak economy to court public sympathy, in case it fails to deliver the numerous promises it made to the electorate.
Economic forum
More recently, during the opening of the “National Economic Forum”, President Mahama described the economic situation he inherited as one of “deep crisis,” citing high debt levels, inflation, and declining investor confidence. “When I assumed office barely two months ago, I inherited an economy that was in a state of deep crisis, one that was weighted down by numerous challenges”, he buttressed.
Furthermore, President Mahama attributed Ghana’s financial difficulties to years of reckless spending, excessive borrowing, and weak economic governance. “The financial struggles that our nation is facing have not arisen overnight.” “They have been the result of several years of financial mismanagement, irresponsible borrowing, reckless spending, and weak leadership.”
Opposition responds
President Mahama’s accusation has naturally elicited responses from members of the New Patriotic Party (NPP). Many spokesmen and women are actively using social media to react to what appears to be a doomsday depiction of the economy by members of the National Democratic Congress (NDC). In a Facebook post, Dr Mohammed Amin Adam, the MP for Karaga and the former Finance Minister posed two questions to President Mahama and his government :
- How could an economy described as “criminally mishandled” able to afford increases in the base pay for public sector workers by 30% in 2023; 23% from Jan – June 2024; and 25% from July – December 2024; and still posted decent fiscal deficits?
- What has changed between December 2024 and February 2025, that suddenly put the economy in crisis, which cannot afford an adjustment in the base pay above 10%.
Similarly, the Member of Parliament for Akuapem North, Mr. Sammy Awuku, also on Facebook disputed the notion that the economy was criminally managed. He explained that though inflation is one of the indicators used to measure the performance of an economy, the level of prices at a given period does not necessarily mean the economy was criminally mismanaged as the NDC alleges.
He argued that in 2012 when President Mahama inherited an economy with inflation at 9.4% from Mills, he pushed to 15.4% by December 2016. On the contrary in 2017, President Akufo-Addo reduced inflation, to 7.6% in September 2019, the lowest in 28 years according to statistics from the Bank of Ghana.
Sammy Awuku recalled some events that overturned his government’s efforts to keep inflation low.
- First was the COVID 19 pandemic which impacted productivity and caused inflation to return to 6 percent by January 2022.
- Second was Russia’s invasion of Ukraine, which pushed the global price of crude oil from $72 to $121 per barrel. Consequently, freight charges increased by 300 percent, which caused imported inflation.
During the period even a stronger economy like Germany experienced its highest inflation in 70 years, while the UK and US recorded their highest inflation in 40 years. This imported inflation significantly contributed to Ghana’s inflation rising to 54 percent by the end of 2022. According to Mr. Awuku, inflation hovered around 23 percent at the time Akufo-Addo handed over the economy to Mahama. He pointed out that an economy that was supposedly “criminally mismanaged” still recorded over six percent growth, higher than Mahama’s 3.4 percent he left for Akufo-Addo.
Moreover, he argued that Akufo-Addo achieved a remarkable trade surplus of US$4.98 billion in December 2024. On the contrary Mahama left 6.7% budget deficit, while the Akufo-Addo improved it to 3.4% by Q3 of 2024. The trade surplus was augmented by $9 billion in gross international reserves to protect the cedi, while Mahama left only $6.1 billion.
Political blame-shifting
In a similar manner, Abena Osei Asare, MP for Atiwa West and former Minister of State at Ministry of Finance responded to some economic issues President Mahama highlighted in his first State of the Nation Address (SONA). The Atiwa East MP described the President’s speech as a “predictable mix of economic doom-saying, political blame-shifting, and populist promises without a credible funding plan.”
She indicated that besides creating a gloomy picture of the economy, President Mahama announced a heavy expansionary fiscal policy that, at best, “may be considered populist and unsustainable.” “It is ironic that, on the one hand, the President describes the economy as being in an intensive care unit (ICU), yet, on the other hand, he is pushing for massive new social intervention programs without indicating how they will be financed”, she buttressed.
According to her, the NPP has never denied the existence of economic challenges at the time it left office. Nevertheless, the government took responsible actions to put the economy on the path of recovery, culminating in the IMF giving the economy a clean bill of health.
She suggested that President Mahama’s attempts to paint an overly bleak picture of the economy ignores key facts:
- The financial sector is in a much stronger position today than it was at the end of 2016. Total banking sector assets have seen significant growth. For instance, the banking sector’s total assets rose from GHS81.2billion in December 2016 to GH₵367.2 billion in October 2024.
- Private sector credit increased by 28.8% in October 2024, compared to negative 7.5% in 2023, showing strong financial recovery.
- The core liquid assets to short-term liabilities and core liquid assets to total assets ratios have significantly improved, as the latest Summary of Economic and Financial Data (January 2025) from the Bank of Ghana clearly shows.
- Depositors’ funds were protected during the financial sector clean-up, preventing the total collapse of the banking industry.
She forecasts that given his criticisms of the financial sector clean up, the President may be setting the stage to dole out new banking licenses similar to what caused the banking and microfinance crisis.
Commenting on the so-called ‘scant reserves’ for debt servicing, she said the President failed to acknowledge the global economic squeeze that affected funding for African economies in recent times.
Despite these challenges she outlined the following achievements by her government:
Achievements
- Gross International Reserves (GIR) improved from US$5.9 billion in December 2023 to US$7.7 billion in October 2024, representing 3.5 months of import cover.
- The cedi remained stable, moving from GH₵12.4 per dollar in December 2023 to GH₵14.50 per dollar in December 2024.
- The NPP administration left resources in place for the new government to meet early 2025 debt service obligations, including the GHS6bn paid out to bondholders, which President Mahama was happy to announce to Ghanaians.
- While the President emphasized the US$250m in the sinking fund at the end of 2016, he failed to acknowledge that there was a whopping US$1bn due external debt repayments alone for the NPP to pay in 2017.
In response to allegations that Ghana’s economy was ‘criminally mismanaged, she explained that like many economies worldwide, Ghana faced similar challenges, but her government took responsible measures to address them, as indicated below:
- Real GDP growth averaged at 6.3% in 2024(Q1 – Q3) led by Industry with a growth of 10.4%
- A positive primary balance of 0.4% (Nov. 2024) as against a negative primary balance -1.4% of GDP in 2016
- Total revenue exceeded its target by 3.3%
Expansionary policies
The former Minister of State argued that for an economy supposedly mismanaged, one would have expected cautious, responsible economic planning from the Mahama government. Instead, the President has outlined a series of new social intervention programs, which raise serious concerns about fiscal sustainability.
Among these are:
- The Agriculture for Economic Transformation Agenda (AETA)
- The Feed Ghana Programme
- The Poultry Farm-to-Table Project (nkoko nkitinkiti)
- The Adwumawura Programme
- The One Million Coders Programme
- The Ghana Medical Trust Fund (MahamaCare)
According to her, these are potentially very expensive programs, yet the President failed to tell Ghanaians how they will be funded. She expected the government to have outlined measures to stabilize the economy before announcing major spending initiatives.
She advised the government to focus on:
- Sustaining and improving the growing confidence in the economy before committing to large-scale social programs.
- Ensuring fiscal discipline and efficient resource allocation.
- Strengthening the private sector to drive sustainable job creation, rather than relying on government-led employment schemes.
National economic dialogue
The Atiwa East MP criticized President Mahama’s over reliance on committees and dialogues in place of decisive action. She expressed doubt whether anything good will emerge from the dialogue. “The president is seeking to procure a rubber stamp for his predetermined programs while avoiding responsibility”, Abena Osei Asare noted.
She questioned why President Mahama had abandoned the manifesto he campaigned and resorted to endless committees, commissions and dialogues. “He should get down to implementing the policies he campaigned on. Governance is about leadership and execution, not deferring responsibility through unnecessary consultations”, she concluded.
