Nigeria suffering just as we are – Akufo-Addo tells BBC in defence of Ghana’s economy

President Nana Addo Dankwa Akufo-Addo with President Buhari

Ghana’s President, Nana Akufo-Addo, has sought to defend his handling of his country’s economy by comparing it to the difficulties the economies of her neighbours such as Nigeria are also going through as a result of the havoc wreaked by the COVID-19 pandemic.

Fuel prices have kept rising in Ghana passing the $1-dollar-per-litre mark.

The cedi also keeps losing its value against the US dollar and other major currencies of international trade.

According to Bloomberg, the Ghana cedi lost more than 18 per cent of its value to the dollar in the first quarter of the year making it the worst-performing currency on the African continent.

Additionally, inflation keeps soaring.

This means people are having to spend more money to buy either the same quantity of items than they did a few weeks and months back due to the combined effect of the depreciating cedi and spiking inflation.

Furthermore, the international market has closed its doors to Ghana as far as borrowing is concerned since the country’s books do not look good.

As of December 2021, Ghana’s debt stock was ¢351.8 billion, the March 2022 Summary of the Economic and Financial Data by the Bank of Ghana (BoG) revealed.

It was ¢344.5 billion in November 2021.

The current debt stock is about 80.1% of the country’s Gross Domestic Product (GDP).

The Summary indicated that about ¢730 million fresh loans were added to the total public debt stock in December 2021.

The domestic debt went up to ¢181.8 billion in December 2021, from ¢179.4 billion in November 2021.

This is equivalent to 41.4 of GDP.

The external component of the total public debt shot up to $28.3 billion (¢170.0 billion), from $27.9 billion in November 2021.

The debt-to-GDP ratio of the external debt is, however, equivalent to 38.7% of GDP.

The cedi component shot up by ¢6.3 billion, primarily due to the decline in the value of the cedi to the dollar during the period.

Both Moody’s and Fitch downgraded Ghana’s economy a couple of months ago as a result of the bad books of the gold-, cocoa- and oil-producing West African nation.

As part of measures to arrest the slump and infuse some oomph into the economy, Mr Akufo-Addo’s government recently announced certain austerity measures and business-boosting policies which included the opening of the country’s land borders that had been closed for the past two years as a result of the pandemic.

A one-sided parliament, also, recently passed the controversial electronic transaction levy which imposes a 1.5 per cent tax on some digital transactions.

The President has already assented to the bill.

Speaking to the BBC’s Peter Okowche about the prevailing economic situation in his country under his watch, President Nana Addo said: “The world is going through very difficult times. Ghana is no exception, Nigeria is no exception”.

“There is no country in the world that has escaped the ravages of COVID-19”, he insisted, adding: “What you need to look at is the elements being put on the ground that looks beyond the Russia-Ukraine war.”

The economy, he noted, “has gone through very difficult times. I can quote statistics of the US and UK economies but they will not serve a purpose. It is a phenomenon that is going on which has made life difficult,” Akufo-Addo explained.

He said: “In Ghana, the recovery programme we have is very credible and that is what is going to give us the opportunity to come out of this period a stronger economy, and it is that future we are looking at. The digital economy is emerging as the biggest economy in the country and for a long period, it has not had any tax at all, so it is important that it also comes into the net”.