Ghana’s President Nana Akufo-Addo said on Tuesday that he inherited an economy reeling from huge fiscal deficits, rising inflation and high unemployment despite an IMF programme designed to stimulate growth.
Ghana, once hailed as a regional growth model, was forced to turn to the International Monetary Fund in 2015 under the former administration for a bailout as global commodity prices tanked.
“The IMF programme negotiated was ostensibly to restore fiscal discipline, debt sustainability and increase economic growth. In fact, virtually all the targets under the IMF programme as at December 2016, have been missed,” Akufo-Addo said in his first state of the nation address to parliament in Accra.
The 72-year-old lawyer, who came to power in January after defeating John Dramani Mahama in a December election, said revenue had fallen short of the projected target.
“The total revenue target for our country was $8.35bn or 22.7% of GDP. But the actual revenue came in at $7.4bn or 19.9% of GDP,” he said.
Afuko-Addo blamed a combination of higher spending and lower-than-projected revenues for a significant increase in the budget deficit for 2016.
“It should be recalled that at the time Ghana entered into the IMF programme to restore fiscal discipline, the fiscal deficit was 10.2% of GDP. It is very clear, therefore, that the Mahama government did not achieve the objectives set out in the programme,” he said.
The president said Ghana’s debt has also been rising.
“As at the beginning of 2009, Ghana’s total debt stock was 9.5 billion cedis. By the end of 2016, the debt had ballooned to 122 billion. In fact, 92% of Ghana’s total debt stock was incurred in the last eight years under the previous government,” he said.
He said irregular power supply, rising inflation and high unemployment have been the lot of Ghanaians, adding that an attempt by the previous government to solve the energy crisis had compounded the debt overhang.
“We have inherited a heavily indebted energy sector, with the net debt reaching $2.4bn as at December 2016,” he said.
Describing the state of public finances as “quite stark”, the Ghanaian leader said he would “not allow this economy to collapse under my watch.”
According to the World Bank, one quarter of Ghana’s 27.4 million people live in poverty. Per capita income in 2015 came to $1 480 as the economy grew by 3.4%.
The west African country is a major exporter of gold, cocoa and lately crude oil.
Akufo-Addo had made tackling the nation’s economic problems the major plank of his election campaign.