Economy is growing but corruption may be eating away 40% of revenue – Joe Jackson explains disconnect between growth & the feeling in pockets

Acting Chief Executive Officer at Dalex Finance Mr Joe Jackson has explained what may be accounting for the inability of Ghanaians to feel the economic growth.

He had said that indeed, the macroeconomic indicators are pointing in the right direction as indicated by the Finance Minister Dr Mohammed Amin Adam in the mid-year budget presentation.

However, it is his view that there is a disconnect between the figures and what the people feel in their pockets.

Speaking on the Key Points on TV3 Saturday, July 27, Mr. Joe Jackson attributed this to corruption.

Corruption, he said, eats away about 40 percent of the public revenue that would have been injected into development projects. Therefore the economy will be growing but corruption is preventing development projects from taking place.

“You have to give the mid-year budget credit, every single macroeconomic indicator is trending in the right direction but you have to interpret the numbers.

“The numbers are truly trending in the right direction but there is a disconnect between the numbers and what we feel in our pockets.

“Corruption could be eating 40 percent of our public revenue away, so there could be growth in the economy, the figures are right but no development to show for due to corruption,” he said.

The Finance Minister Dr Mohammed Amin Adam had said that the rate at which Ghana’s economy is growing exceeds their expectation.

He said that the 4.7 percent growth rate reported by the Ghana Statistical Service for the first quarter of 2024 exceeds the revised target of 3.1 percent;

Presenting the mid-year budget review in Parliament on Tuesday, July 23, he highlighted that inflation is declining.

“End-June inflation rate of 22.8 percent, a reduction of 31 percentage points since December, 2022, confirms the target threshold of /-2 of 15 percent by end 2024 is possible.

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“Exchange rate has largely stabilised, compared to December, 2022, despite the
recent pressures. The 18.6 percent depreciation rate to the US Dollar as of June 2024, represents an improvement over the 22.0 percent recorded for the same period last year; and

“Gross International Reserves reached 3.1 months of import as at end June 2024 against 2.5 months of imports in the same period last year.”

Dr Amin Adam further stated it is evident that the government is on the right trajectory.

“The economy is rebounding stronger than anticipated. The choices we have made and the policies we are implementing are yielding results. We have reversed the negative trends, all the indicators are looking better. I want to assure you that we will stay on this path and continue to make the right choices. Our economic recovery is fast and strong,” he said.

He further stated that over the last six months, the government has sought to bring some urgency and speed to the implementation of key government programmes and also swiftly
provided the necessary support for growth-enhancing initiatives.

“I am again happy to inform this august House that with the support of His Excellency the President, Cabinet and other Stakeholders,: We have successfully concluded the second review of our Extended Credit Facility with the International Monetary Fund (IMF) which led to the disbursement of the 3rd tranche of 360 million US Dollars, bringing total
disbursement to about US$1.6 billion;

“We have completed the Debt Restructuring programme with the Official Creditor Committee (OCC), covering US$5.1 billion dollars resulting in approximately 2.8 billion US Dollars of debt relief. This means that we will not service our debt to our official creditors from 2023 to 2026; We have concluded negotiations with our Eurobond holders, covering 13.1 billion US Dollars, which will lead to a cancellation of 4.7 billion US Dollars
of our debt and provide debt service relief of 4.4 billion US Dollars between
2023 and 2026.

We have concluded our negotiations with five (5) of the seven (7) Independent Power Producers, which will lead to a saving of some of US$6.6 US Billion over the lifetime of the Purchasing Power Agreements (PPAs); We have reined in expenditures to ensure we are within 2024 Budget Appropriation and exceeded the midyear revenue target by 0.2 percent by end-June, 2024.

“In effect, Mr. Speaker, we are living within our means. Indeed, consistent with our programme with the IMF, we are on course to achieving a primary surplus of 0.5 percent of GDP by end of the year. We have cleared all outstanding Bank Transfer Advice (BTAs) up to 2022, and working hard to pay BTAs from 2023.”

 

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