Economic indicators were worse in 2023 than what Akufo-Addo inherited in 2016 – IEA

The Institute of Economic Affairs (IEA) has criticized the government for its poor macroeconomic performance from 2020 to 2022.

During this period, Ghana experienced an economic downturn, with the government seeking a 3 billion bailout from the International Monetary Fund (IMF).

Giving a post-analysis of President Akufo-Addo’s State of the Nation Address (SONA), on April 3, 2024, Dr. John Kwakye, the Director of Research at the IEA, attributed the struggling economy to the government’s inappropriate policies, such as excessive spending and costly borrowing.

He urged the government to take responsibility for the poor macroeconomic performance from 2020 to 2022.

“Government must, however, equally accept responsibility for the poor macroeconomic outcomes during 2020-22, which happened due to inappropriate policies, such as excessive spending, including on numerous flagship programmes, and excessive and expensive borrowing.”

He acknowledged that the COVID-19 pandemic and the Russia-Ukraine war also negatively impacted the economy.

“While exogenous shocks, in particular Covid-19 and the Russia-Ukraine war, also played a negative role, they impacted the economy against the backdrop of existing vulnerabilities, which compounded Ghana’s economic crisis,” he stated.

Dr Kwakye pointed out that almost all the macroeconomic indicators were worse in 2023 than what the government inherited in 2016.

“The President noted that the macro economy was stronger in 2023 than in 2022, citing inflation, GDP growth, depreciation, reserves, and current account figures to illustrate his assertion. He added that the macroeconomic indicators were, once again, “pointing in the right direction.” While his description of the macroeconomic situation in 2023 compared with 2022 was right, using 2022 as his base for comparison appears a bit self-serving.

“This is because 2022 saw record deterioration in many of the indicators. Indeed, the fact is that almost all the indicators were worse in 2023 than what the Government inherited in 2016. It is the case that the indicators generally improved during 2017-19 and worsened during 2022-23.”

He commended the government for the improved outcomes from 2017 to 2019.

“The Government must be commended for the improved outcomes during 2017-19, which occurred on the back of both improved policies, including enactment and observance of the Fiscal Responsibility Act (FRA). Favourable exogenous conditions, such as stable oil prices, also played a positive contributory role.

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