I disagree with Pierre Laporte on economy deterioration prior Covid – Ofori-Atta
The country’s Finance Chief, Ken Ofori-Atta, has said he disagrees with an assertion made by World Bank Country Director for Ghana, Liberia and Sierra Leone, Frank Pierre Laporte, that Ghana was already facing economic challenges prior to the outbreak of the Covid-19 pandemic.
Pierre Laporte speaking at a public lecture organized by the One Ghana Movement in March this year, said the country’s economic woes – after the outbreak of the Covid pandemic – were expected as the country’s macroeconomic indicators were pointing in the wrong direction prior to the outbreak.
Mr. Laporte at the lecture, said his outfit had spoken to the Finance Minister, who “acknowledges the severity of the situation.”
“Yes, COVID-19 has not helped, but even before COVID-19, there were signs that the situation was getting a little bit more challenging. The key thing is to be transparent with the people”, he noted.
“Is it a really serious situation? Well, the numbers speak for themselves. The situation is very serious. At the World Bank, we’ve not hidden the fact when we’ve held discussions with government officials and even the head of state that, Ghana faces a very tough road ahead to restore macro sustainability,” he added.
The Bank of Ghana, in its January 2022 Monetary Policy Report, said the stock of public debt was equivalent to 78.4% of GDP at the end of 2021, compared with 76.1% of GDP at the end of 2020.
The country’s total public debt stock stood at about GHS 344.5 billion as of November 2021, a situation experts described as worrying.
But reacting to a question posed to him (Ken Ofori-Atta) by Hon. Okudzeto Ablakwa at the Minister’s Censure Hearing on Friday, November 18, on what his thoughts were on the assertion made by Mr Laporte, Mr Ofori-Atta disagreed with the assertion made by the World Bank Country Director noting he does not know the metrics used and based on which Mr Laporte averred the country was facing difficulties prior to the outbreak of the Covid pandemic.
“I don’t know what metrics Mr Laporte was looking at, but I disagree with him on that, the economy started facing difficulties after the outbreak of the pandemic (sic),” he quipped.
The Ghanaian economy prior to the outbreak of the Covid pandemic recorded average growth rate of 7% with single digits of inflation.
The country’s debt-to-GDP although on an upward trend, was sustainable and below the 70% maximum threshold.
However, after the outbreak of the Covid pandemic, Ghana’s GDP growth rate declined significantly recording 0.9% growth rate at the end of 2020.
The country’s debt-to-GDP increased significantly exceeding the 70% threshold and becoming unsustainable as the country borrowed from creditors to help it fight the global pandemic
Recently, due to the impact of the Russian-Ukraine war, the country’s inflation rate has hit a record high of 40.4% with the cedi recording a year-to-date depreciation rate of 52% against the US dollar.
