GDP figures do not look credible – Bawumia

Dr. Mahamudu Bawumia, Vice Presidential candidate to Nana Akufo-Addo for the 2016 Election has criticized the government for completely mismanaging the economy, precipitating a grave decline in economic growth and also questioned the credibility of the Real GDP figures provided by the government for 2014.

Dr. Bawumia made the comments in Milton Keynes, United Kingdom on Saturday.

“The 2015 budget shows an economy in decline. After six years in government, during which the NDC claimed unprecedented economic growth, the harsh truth is that real GDP growth is in decline. Real GDP growth has declined from 15% in 2011 (with the onset of oil production to a projected 3.9% in 2015 (including oil). The budget is projecting non-oil growth of 2.7% in 2015. These facts are as revealing as they are disturbing.”

The former Deputy Governor of the Bank of Ghana, also challenged the government on its claims that the economy was recovering when at the same time, it was projecting a lower growth for the economy in 2015.

“The government is claiming that the economy is recovering. If indeed the economy is recovering as indicated by the government, and we have “turned the curve”, what will be explaining the further decline in growth in a year that should be focused on rebuilding after the challenges of 2014? What sort of recovery sees real GDP growth decline from a purported 6.9% in 2014 to 3.9% in 2015?” he queried.

“The growth rate in 2015 would be just about what it was in the year 2000 and half the rate of the 8.4% achieved in 2008 without oil!!!! Non-oil growth in 2015 will be below the growth rates attained in 2000! The decline in real GDP growth is reflected in all the sectors, (Agriculture, Industry and Services). In the midst of this deep decline in economic activity we wonder what scope exists for the Minister of Finance to rake in revenues to support infrastructure development and meet Government’s statutory obligations,” Dr. Bawumia said.

Dr. Bawumia further questioned the credibility of the figures presented by the government as real GDP growth for 2014, using the government’s own projections.

“There is however something that is not quite right with the real GDP numbers. They lack credibility. How can an economy which went through so much turmoil in 2014, with a 31% depreciation of the currency and massive load shedding register real GDP growth of 6.9% only to decline sharply to 3.9% when the government claims the economy is in recovering," he said.

Dr. Bawumia proceeded to explain why it is important for the figures to be examined and why it is more important to ensure that the figures provided are credible.

“Is the recovery in reverse gear? Something is not quite right with the numbers. Our view is that the 6.9% real GDP growth reported by the Ghana Statistical Service is, putting it mildly, counter-intuitive and needs to be re-examined. Otherwise, the government should explain the reason for this sharp decline in real GDP growth in 2015. This is important because if the real GDP numbers for 2014 are overstated, it would have implications for the 2015 projections and policies. In that case, the 2015 budget would be out of gear abinitio,” he added.

Dr. Bawumia who was speaking to the United Kingdom branch of the Young Executive Forum, ended by explaining the consequences of the government’s mismanagement which had virtually halted economic growth.

“Slow growth means higher unemployment, higher prices and declining revenues. In this respect, the NDC administration has woefully failed Ghanaians and one is deeply worried about the depth to which the economy is sinking,” he stated.