Introduction
The two main political parties, the ruling New Patriotic Party (NPP) and the largest opposition party, the National Democratic Congress (NDC) have outdoored their respective manifestos, ahead of the December 2020 general elections. The manifestos are replete with a bevy of promises, on which the two parties have anchored their developmental intentions for the people of Ghana.
These developmental blueprints are a meant to pitch the respective manifestos to the Ghanaian electoral to decide for themselves the political party with superior ideas, records as well as the party which could better govern the nation.
While some economists and development experts have argued that the nations are better governed and developed through medium to long-term national development strategies, others are also of the school of thought that, manifestos offer voters the platform, for distilling and understanding the visions of political parties in elective democracies.
Since the advent of the Fourth Republican Constitution in Ghana, manifestos have played and continue to play crucial roles in convincing voters and making Ghana’s democratic experiment more issues based.
Focus and basis of analyses
The Ghana Economic Dialogue (GED), a group of development-focused Ghanaian economists and other professionals has therefore decided to scrutinise and analyse the manifesto promises laid out by the two dominant parties, to help voters appreciate the nuances of each manifesto and to help them make the relevant decisions ahead of the general elections.
The GED analyses are also meant to help ascertain credibility of the economic data, clarify the contents and claims made in the manifestos and, by extension, determine the superiority and potential ability of either party to execute the promises laid out in the manifestos.
The NPP’s manifesto, which was launched on August 22, 2020 was christened: “Accounting for our Stewardship,” while the NDC’s 2020 manifesto, launched on September 7, 2020 was titled: “The People’s Manifesto.”
Data provided by the International Monetary Fund (IMF), the World Bank and other development agencies as well the government of Ghana’s own data at the Ministry of Finance show that the Ghanaian economy is in debt distress. The country’s Gross Domestic Product (GDP), which measures the total value of goods and services produced in the country is projected to grow at a paltry 0.9 percent at the end of the year, the lowest since 1992.
Serialised reviews
This week, our team of economists led by Dr. Jerry Monfant decided to take a look at the NPP’s manifesto since they were the first major political party to publish their manifesto.
The primary anchor of the NPP Manifesto is: “Promises made, promises delivered.” Below, we highlight some macro-economic indicators as posted in the NPP’s manifesto, which are in many aspects misleading and accurate. Below, the team takes some of the claims in the manifesto and offers our frank assessment on each individual claim:
NPP’s claim on overall macro-economic stability and GED’s finding
The fiscal deficit declined from 6.8 percent of rebased GDP in 2016 to 3.8 percent in 2018 and ended at 4.8 percent in 2019.
Contrary to the NPP’s claims, GED found that, in 2018, the fiscal deficit was rather 7.0 percent, moved to 7.5 percent in 2019 and is projected to close 2020 at 11.4 percent. The figures are corroborated by the April 2020 Report of the IMF and World Bank. The NPP’s manifesto claims are therefore inaccurate and false.
NPP’s claim on primary surplus and GED’s finding
The NPP claimed in its manifesto that the government recorded a primary surplus for three years in a row: 0.5 percent of GDP in 2017, 1.4 percent of GDP in 2018, and 0.9 percent as compared to a deficit of 1.1 percent in 2016.
The GED cross checked all the numbers indicated under this section and found all to be false.
The primary balance, which is an indication of our debt affordability rather recorded deficits in the three years under the watch of the current government. In 2018, the deficit was 1.4 percent. The deficit increased to 1.8 percent in 2019 and is further projected to close the year at 4.1 percent. These indicators are validated by the IMF and the World Bank report.
NPP’s claim on declining economic growth and GED’s finding
The main challenge faced Ghanaians prior to the NPP assuming the reins of power was declining economic growth. In 2016 the GDP growth rate was 3.6 percent.
The GED found that while the country’s GDP in 2016 was 3.6 percent, a situation which was brought about by declining crude oil prices and other primary commodities on which these sub-Saharan African economies depend, other nations in the region grew between 2.0 and 3.6 percent in the same period. Again, the IMF has projected a gloomy year-end growth rate of 0.9 percent for the country.
NPP’s claim on government borrowing and GED’s finding
According to the manifesto claim, between 2008 and 2012, Ghana’s debt stock increased by 267 percent and between 2012 and 2016, the increase was 243 percent, whereas the increase from 2016 to 2019 was 76 percent (including one- time financial sector bailout).
Here again, the GED observed that the NPP’s manifesto claim on the rate of borrowing is misleading. In fact, total borrowing was confused with the rate of borrowing. It is imperative to note that the rate of borrowing is the frequency of borrowing while the total percentage of borrowing is benchmarked against a base borrowing figure and therefore could not be termed as a rate of borrowing. Verifiable figures showed that the total percentage of the government’s borrowing is about 110 percent as against the base figure of GHS122 billion inherited from the previous government.
Conclusion
In many aspects, the GED’s position is that the NPP manifesto on the economy is not reliable. It is worthy of note that as the party in power the NPP should display a lot of honesty and candour. This is especially crucial because, there are dire consequences for the economy hit if our our international partners begin to question the credibility of data presented by the government.
Authors:
The Ghana Economic Dialogue (GED) is a Team of Economists and technical experts, which have pooled their expertise, to help contribute to shaping the national developmental discourse. The GED Team can be reached at: info@ghanaecondialogue.com
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