The Economic Policy Adviser to the Office of the Vice President, Dr. Sharif Mahmud Khalid, has launched a strong critique against the previous New Patriotic Party (NPP) government, attributing Ghana’s current economic challenges to their alleged reckless borrowing and mismanagement. Dr. Khalid contends that the NPP’s economic policies created an “overheated economy” characterized by unsustainable debt levels and negative macroeconomic indicators, which the current administration inherited upon assuming office. He emphasized the necessity of clarifying the underlying factors contributing to the recent stabilization of the Ghanaian cedi, asserting that this positive development is a direct result of the current government’s commitment to painful but necessary reforms, a path the previous administration allegedly avoided.
Dr. Khalid highlighted the current government’s dedication to implementing a domestic debt exchange program, securing an IMF program, and enforcing fiscal discipline and internal controls as crucial steps towards stabilizing the economy. He questioned the economic trajectory Ghana would have followed had these measures not been implemented. Furthermore, he accused the opposition, the NPP, of attempting to distance themselves from the consequences of their actions, particularly the substantial borrowing spree during their tenure. He pointed to the dire economic situation prevalent at the time the current administration took office, including a central bank experiencing losses, a domestic debt exchange program in progress, and even blue-chip investments like pensions being affected, underscoring the depth of the economic crisis.
Dr. Khalid asserted that the observed relative macroeconomic stability is a direct consequence of the current administration’s genuine commitment to addressing the inherited economic mess. He credited the improvement to specific actions taken by the government, including reviving the Sinking Fund, downsizing the government, and adhering to IMF conditions. These measures, according to Dr. Khalid, demonstrate fiscal discipline and responsible economic management rather than mere fortuitous circumstances. He highlighted the dire state of the Sinking Fund upon assuming office, with a balance of just over $60,000, and emphasized the government’s commitment to fulfilling its financial obligations, whether through in-kind payments or cash settlements, as a hallmark of prudent economic stewardship.
Dr. Khalid’s argument centers on the contrast between the previous administration’s alleged mismanagement and the current government’s commitment to fiscal responsibility. He attributes the economic woes inherited by the current administration to the NPP’s excessive borrowing and lack of fiscal discipline, leading to an overheated economy rife with negative indicators. In contrast, he portrays the current government’s actions, such as the domestic debt exchange program, engagement with the IMF, and adherence to fiscal discipline, as crucial steps towards economic recovery and stability. He further accuses the opposition of attempting to evade responsibility for their past actions, highlighting the economic challenges they left behind.
The core of Dr. Khalid’s defense of the current government’s economic strategy rests on the assertion that the relative stability achieved is not accidental but rather a product of deliberate and difficult reforms. The revival of the Sinking Fund, downsizing the government, and adherence to IMF conditions are presented as concrete examples of the government’s commitment to responsible economic management. He emphasizes the stark contrast between the depleted state of the Sinking Fund under the previous administration and the current government’s efforts to replenish and utilize it responsibly.
In essence, Dr. Khalid’s narrative frames the current economic situation as a consequence of past mismanagement, for which he holds the previous NPP government responsible. He portrays the current administration as actively working to rectify these issues through disciplined fiscal policies and engagement with international institutions like the IMF. The recent stabilization of the cedi, according to him, is a testament to these efforts. He further underscores the government’s commitment to fulfilling its financial obligations, positioning them as a responsible and prudent steward of the national economy.
