A former Minister of Finance, Mr Seth Terkper, is not impressed with the performance of the economy over the last two years, stating that the government is not doing enough to convert the stability in power supply and increased inflows from petroleum into bigger gains for the citizens and the country at large.
He said the stabilisation of the one-time debilitating power crisis and the increase in oil and gas production through the coming on board of the Tweneboah-Enyera-Ntomme (TEN) and Sankofa fields provided a solid foundation upon which the economy should be doing better than it was now.
In an interview on CITI TV, Mr Terkper said the unimpressive growth was a result of the government’s inability to properly prioritise investments in growth-driven areas.
He mentioned the drop in capital expenditure as one policy decision that had led to a stunted growth in the real economy irrespective of the potential for strong growth.
Ghana’s economy expanded at the fastest rate in five years in 2017 as oil and gas production surged.
Gross domestic product expanded by 8.5 per cent in 2017 compared with 3.7 per cent in 2016.
Both the International Monetary Fund (IMF) and the World Bank have commended the country for making strides in the growth of the economy as the IMF, in a statement to conclude its staff visit to Ghana in June, expressed satisfaction with the government and how it was handling the economy.
The World Bank Country Director for Ghana, Liberia and Sierra Leone, Mr Henry Kerali, during a recent stakeholder forum, also hailed the country’s economic growth for 2017, describing it as positive.
Mr. Terkper, however, said unlike the previous administration which was battling with a long-standing power crisis which affected the economy, he expected a stronger and better economy under this new government.
“I expected a better performance of the economy. The previous government went through two and half years of disruption in gas supply from Nigeria which resulted in the power crisis, leading to a downturn in the economy,” he stated.
Drop in oil prices
Mr. Terkper said the economy also suffered due to setbacks at the Jubilee Field, coupled with a drop in oil prices on the international market.
“These situations made it difficult for the economy to grow under our tenure,” he stated.
He said despite those challenges, the government created some buffers such as the sinking fund and the stabilisation fund when the crude oil prices were high.
“We used our own oil resources, about GH¢500 million of the oil revenue, to take off a bond for the first time, something which hardly happens in Africa. We also put in place the ESLA which is generating about GH¢3.4 billion annually,” he explained.
“Now the disruption in gas supply and power has been restored. ESLA is generating about GH¢3.4 billion annually, crude oil prices have rebounded at a time when we have TEN and Sankofa on stream so we are getting more crude oil at higher prices. There is some revenue inflow into the economy compared to the depressed state we found ourselves in, so I expected the economy to be doing better than it is now,” he emphasised.