Isaac Adongo stunned by Dr. Addison’s admission of messy Ghana’s economy

Member of Parliament (MP) for Bolgatanga Central, Hon. Isaac Adongo has expressed shock at comments by Bank of Ghana (BoG) Governor Dr. Ernest Addison that paint the picture that the country is in a mess.

The BoG governor while speaking at the 2021 Annual Bankers Week Dinner of the Chartered Institute of Bankers on December 9, 2021, warned that Ghana’s high deficit is unsustainable.

He said because of that, investors have lost trust and confidence in the government’s ability to salvage the situation based on its policies since the presentation of the 2021 mid-year budget in July last year.

“The recent widening of the Ghana’s sovereign bond spreads after a successful bond issue in April 2021 surprised all of us, although we were aware of investor sentiments and their assessment of Ghana’s fiscal risks as they see the fiscal deficit outturn for 2020 as unsustainable and expecting very bold and decisive measures from the government to re-anchor fiscal consolidation and stabilize debt.

“Investors have assessed that, as compared to our peers, Ghana required a stronger fiscal rectitude to re-establish investor confidence, and did not see the mid-year budget as addressing their sentiments. The markets assessment of the 2022 budget also suggest lingering doubts about the ability of the revenue measures announced to translate into a large increase in domestic revenue. To add to this, government expenditure is projected to increase significantly in 2022,” Dr. Addison said.

Having heard this from the Bank of Ghana governor, Bolgatanga Central legislature Isaac Adongo says he is unsure if he is dreaming or Dr. Addison really made the admission.

In a Facebook post, the MP says, “after years of living in denials and a window dressed economy, it is obvious that the chickens have finally come home to roost.”

Read the full post on Isaac Adongo’s Facebook wall below:

Hon Isaac Adongo writes…

Bank of Ghana’s Bombshell on The Economy.

Did Dr Addison really say this or it is a dream?

Well, after years of living in denials and a window dressed economy, it is obvious that the chickens have finally come home to roost.

Dr Ernest Addison, the Governor of the Bank of Ghana, now admits to the mismanagement of Ghana’s economy, leading to the current high fiscal risks. In his own words as said at the 2021 Annual Bankers Week Dinner of the Chartered Institute of Bankers, Ghana, the Governor warned that our high deficit is unsustainable and that it is worse than our peers in West Africa. Because of that he said investors have lost trust and confidence in the Government’s ability to salvage the situation based on its policies since the presentation of the 2021 mid-year budget in July last year.

He adds that investors’ doubts in the government’s ability to return the economy to a sustainable path of fiscal consolidation and debt sustainability manifested throughout this year and has now been magnified by the unconvincing nature of the 2022 Budget.

He also laments the high levels of expenditures programmed in the 2022 budget, confirming the general view that the solution to the economic crisis lies in cutting the expenditures, and not shoving the ill-conceived E-Levy and other draconian tax measures down the throats of Ghanaians.

Hear him in his own words when he addressed members of the Chartered Institute of Bankers on the night of Friday, December 9, 2021.

“The recent widening of the Ghana’s sovereign bond spreads after a successful bond issue in April 2021 surprised all of us, although we were aware of investor sentiments and their assessment of Ghana’s fiscal risks as they see the fiscal deficit outturn for 2020 as unsustainable and expecting very bold and decisive measures from the government to re-anchor fiscal consolidation and stabilize debt. Investors have assessed that, as compared to our peers, Ghana required a stronger fiscal rectitude to re-establish investor confidence, and did not see the mid-year budget as addressing their sentiments. The markets assessment of the 2022 budget also suggest lingering doubts about the ability of the revenue measures announced to translate into a large increase in domestic revenue. To add to this, government expenditure is projected to increase significantly in 2022.”

For now, I elect to say nothing. But surely, I will be back.