Development Economist and Head of Research at the Danquah Institute, Dr. Frank Bannor, has emphasized that the opposition NDC’s flagbearer John Mahama’s economic track record does not provide a solid foundation for any proposed reset of Ghana’s economy, nor does his past performance align with the aspirations for significant economic growth and development.
In an interview on ADOM TV BADWAM Show on Monday, October 28, 2024, Dr. Bannor said the former president’s economic achievements should not be viewed as a stepping stone for ambitious growth plans. He further indicated that the narrative surrounding Mahama’s tenure lacks the glamour often associated with successful leadership in economic transformation.
“When we look at the figures, it’s clear that Mahama’s track record of economic growth is not glamorous. The economic growth rate in 2016 under Mahama stood at a mere 3.4%, the lowest in two decades. Under his administration, with all other macroeconomic indicators pointing in the wrong direction, it is simply not feasible to suggest that he can reset Ghana and put it on a higher growth trajectory should he be given the nod again to lead the country,” he added.
Mahama’s record
Dr. Bannor further noted that when Mahama left office, inflation had soared to 15.4%, a statistic corroborated by the last available data from the Ghana Statistical Service. This was without the world experiencing any pandemic or war. In stark contrast, he highlighted that the current administration under President Nana Akufo-Addo managed to reduce inflation to 7.9% as of September 2019. “These statistics are indicative of what many consider economic mismanagement during Mahama’s tenure,” he asserted.
He also recalled the significant challenges faced by Ghanaians during Mahama’s administration, particularly the four years of persistent power outages known as ‘Dumsor’. “We endured ‘Dumsor’ for four years, leading to the destruction of industries and livelihoods. People died because of these power outages. The National Health Service virtually collapsed, and the ambulance services were nearly non-functional,” Dr. Bannor stated.
He highlighted that unemployment rates surged, GDP declined, and industrial growth stagnated during this period, contributing to a banking sector on the brink of collapse.
“Mahama left office with a growth rate of just 3.4%. In contrast, look at Ghana today: the economy grew by 4.7% in the first quarter of this year and 6.9% in the second quarter amidst global challenges,” Dr. Bannor pointed out. He contrasted this with the inflation rate, which fell to 7.9% under Akufo-Addo—the lowest level achieved since March 1992. “Akufo-Addo has performed better even in the face of global economic dynamics,” he noted.
Dr. Bannor also emphasized that the challenges faced during Mahama’s tenure were not influenced by external factors such as the COVID-19 pandemic or the Russia-Ukraine conflict, which have posed significant hurdles for economies worldwide in recent years. “Under Mahama, there was no COVID-19, and there was no Russia-Ukraine crisis, yet he left a growth rate of only 3.4%,” he said. He questioned the economic management of Mahama, particularly regarding the circumstances that led Ghana to seek assistance from the International Monetary Fund (IMF).
“What would you call the economy managed by John Mahama, which ultimately took us into the embrace of the IMF?” he asked, highlighting the stark contrast in economic governance between the two administrations. Dr. Bannor also addressed the importance of demand in commodity exports such as cocoa and gold, stressing that an economy cannot thrive without adequate demand for its primary exports. “If there’s no demand, it is not economically conducive. We need to focus on building a sustainable economic environment that promotes growth.
Genesis of fiscal struggles
Dr. Bannor further raised concerns over what he describes as deep-seated government inefficiencies, which, according to him, date back to Ghana’s earliest years of independence. In a recent address, Dr. Bannor cited historical economic trends to argue that inefficiencies in government management are not new but have existed since the country gained independence in 1957.
According to him, the nation’s first fiscal deficit—where government spending surpassed tax revenue—occurred in 1959, only two years after independence. “Government inefficiencies have existed since Independence,” Dr. Bannor stated, underscoring the early signs of Ghana’s fiscal struggles. “For example, our first fiscal deficit in terms of government expenditure exceeding tax revenue occurred in 1959.”
He noted that while the optimism surrounding Ghana’s independence was high, financial management issues surfaced quickly, with expenditures surpassing revenues almost immediately. According to Dr. Bannor, this marked the beginning of a fiscal trend that has continued to affect the country’s economic stability, resulting in budgetary deficits and financial constraints over successive administrations.