The governing New Patriotic Party (NPP) has blamed the difficulty to grow the economy and improve lives thereby, on the poor performance of the erstwhile National Democratic Congress (NDC) government.
According to the NPP’s deputy communications director, Ernest Owusu-Bempah Bonsu, the failure of the NDC to negotiate good deals in the energy sector largely accounts for the crisis the nation has been plunged into.
Mr Owusu-Bempah Bonsu’s stance is in agreement with the World Bank Country Director (Ghana), Pierre Frank Laporte’s assertions about the economy.
Mr Laporte had said the said that, unreasonable energy sector agreement is among the factors that forced Ghana into a situation where the country is now seeking support from the International Monetary Fund (IMF).
“The big issue has been on the fiscal side. Before the current crisis happened, we observed certain challenges on the budget side that really has been the area more hit by everything. Also where actions are required now to deal with them.
“For instance, on the revenue side, we have always been saying that this is an area where Ghana should do better. We are encouraged by the fact that this should be one of the areas for potential programme and support from the World Bank. The problem is fiscal, not just revenue.
“The problem is that there are also spillovers from other sectors, or instance, the energy sector. There is about one billion dollars going to the energy sector because of losses. The sector itself is not financially viable and to keep it going you have to subsidize.
“Actions are required. Of course with Covid-19, the general business environment is been a bit more difficult,” Mr Laporte said in his interview with TV3’s Paa Kwasi Asare.
Supporting the assertions of the World Bank Country Director, Mr Ernest Owusu-Bempah Bonsu believed that if the government kept back funds that continue to go into service debts, many of the challenges would have been resolved.
For instance, the country has started paying annual excess gas capacity charges of between $550million and $850 million every year due to another contract that the previous government entered into with gas producers.
Specifically, the government paid $520m (GH¢2.7 billion) energy sector debt in 2018; $604m (GH¢3.14 billion) in 2019, $ 1 billion (GH¢5.2 billion) payment in 2019 and now paying over $ 1 billion.
“if the funds remained in Government’s accounts, in this era of Russia-Ukraine war, the government could have utilized it but because of the bad agreement by the NDC, we have incurred the debt we are paying today,” he told Angelonline.com.gh
“if not for the debt clearance, which the NDC government incurred, we would have excess of about 4 billion or 7 billion which we would not have gone to the World Bank to ask for 20 billion to run the economy,” he added