Minority hits back at critics over the economy

Accra, Jan. 15, GNA - The Minority NPP in Parliament on Thursday said the country's economy as at December 31, 2008 was in far better shape relative to the economy that it inherited in 2001. Mr. Osei Kyei-Mensah Bonsu, Minority Leader, said over the past few days the nation had been inundated with misinformation about the state of the nation's economy.

"This culmination of events is the seemingly purposeful twist of facts as stated by the Country Director of the World Bank. The subsequent elucidation or rectification, if you like, of the situation by the Country Director has rather left the average Ghanaian confused," he told a press briefing at Parliament House.

He said the purpose of the briefing was to set the records straight "since it is our sincere belief that the people of this country, including, in particular, the new administration, need to be properly informed about the health of the economy as at December 31, 2008." Giving some comparative figures, the Minority Leader said as at January 2001, when the NPP took over from the NDC, the economic growth rate was 3.7 per cent and as at December 2008, this figure had risen to 6.6 per cent.

He said inflation for the same period was 40.5 per cent in 2001 and 18.1 by the end of 2008.

On the interest rates, he said the 91-day Treasury bill was 38 per cent in 2001 but fell to 24.7 per cent as at the end of 2008. The Minority Leader said exchange rate depreciation for the same period was 49.8 per cent in 2001 which fell to 20.1 per cent at the end of 2008. He said the minimum wage as at January 2001, was GHp 42 but had risen to GH¢2.25 in 2008 while the gross international reserves for the same period climbed from 233.4 million dollars to 2,036 million dollars by the end of 2008.

"Ladies and gentlemen, by all accounts, the economy as at December 31, 2008 was in far better shape relative to the economy that was inherited in 2001," he said.

Mr Kyei-Mensah-Bonsu said the World Bank report on the economy suggested a high deficit of about 13.8 per cent of Gross Domestic Product (GDP) but this could be explained by certain developments, such as 3.5 per cent of GDP of the deficit resulting from capital expenditures financed by the proceeds from the sovereign bonds which will not occur in 2009.

Secondly, as a result of higher than anticipated increase in oil prices, government's direct spending on purchases of crude oil for the Volta River Authority increased by an additional 1.9 of the GDP. Thirdly, he said, as a result of the oil and food shock, government had to remove tariffs on some products and also reduce petroleum taxes. This resulted in about an additional 0.4 GDP deficit.

He said government also continued to pay subsidies on electricity tariffs, which amounted to about 0.5 of GDP on the deficit. 15 Jan. 09