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Business News of Sunday, 22 November 2020


Deception, huge consumption spending killing Ghana’s economy – Terkper

Seth Terkper is a former Finance Minister play videoSeth Terkper is a former Finance Minister

Finance Minister, Seth Terkper, has said the current Finance Minister’s penchant to churn out questionable figures during budget presentations so his books will look good, is contributing to Ghana’s troubled economy.

According to him, because Ken Ofori-Atta usually fails to provide the true figure of, for instance the budget deficit, the financial system -- which he said cannot be cheated -- is bringing out the true nature of the economy.

“Even today as we speak, look at the budget. We have the arrears figure for the 2020 budget – it is GH¢ 1.4 billion or so…and we just did the Mid-Year Review…look at this number and ask yourself if we are going to pay the IPPs [Independent Power Producers] considering that ESLA is already encumbered as revenue does the deficit reflect the fact that you are going to pay IPPs?

“Does the deficit reflect all the payments we are making to depositors [of defunct financial institutions]? Because the Securities and Exchange Commission says it will refund their money…do they reflect in the fiscal that was presented? And once you pay these things, the financial systems will throw them out. You may buy yourself time but the system will throw them out,” he said about some of the finance minister’s figures that do not add up.

Mr Terkper was speaking during a round table discussion with business journalists on Friday, November 20, 2020, on ways to achieve a healthy economy.

Mr Ofori-Atta has been accused many times of cooking up figures presented in his budget statements.

Last year, Minority Leader, Haruna Iddrisu, accused him of massaging figures in the 2020 budget.

He said the minister manufactured figures to deceive Ghanaians into thinking that the economy was healthy.

Mr Terkper said another reason Ghana’s economy under Nana Addo Dankwa Akufo-Addo’s government is facing challenges is its huge consumption expenditure.

“I think that there is a lot that is being spent on expenditure and that is something which I think as a nation, we can’t keep spending on consumption,” he said.

The former minister also bemoaned what he believes is a particularly high-interest payment on loans.

“Our compensation and interest payments are high. We are using more than 100% of tax revenue for compensation. You can argue that you have non-tax revenue and others but remember your tax revenue includes the earmarked funds,” he stressed.