The Minister of Finance, Ken Ofori-Atta, yesterday spoke eloquently about the bright outlook of Ghana’s economy towards the second half of the year as he presented the 2023 Mid-Year Budget Review in Parliament.

But the Minority Leader, Dr Cassiel Ato Forson, addressing the media after the minister’s presentation, said the downward revision of the GDP target was an indication that the economy was declining, and that it would affect jobs and the general welfare of Ghanaians.

He said the cedi’s supposed stability at present was merely artificial, and that the claims by the Finance Minister about the currency’s supposed recovery were not supported by evidence on the ground.

He said the cedi’s current state was artificial because government had defaulted in the payment of interest and principals on external debts.

Dr Forson stressed that the minister’s claim that the economy had "turned the corner" could also not be true, and that the government had rather deepened the woes of ordinary Ghanaians.

Declining economy

The Minority Leader said while presenting the 2023 Budget, the minister had promised not to borrow from the domestic market, "but between January and June this year, the minister has borrowed GH¢5.5 billion from the treasury bills market with a promise to borrow GH¢41 billion more by the end of the year.

"No wonder inflation is going up. No wonder the central bank is busily increasing monetary policy rate.

No wonder the lending rate is still going up,” he said.

The Minority Leader said the government had the opportunity to reduce lending rate downward to somewhere under 15 per cent, but due to the activities of government, particularly in terms of over-borrowing and over expenditure, lending rate and market rate were still going up.

"I won't be surprised that at the end of the year, inflation will not make any headway.

This is a gargantuan missed opportunity," he said.

Dr Forson said he was merely "warming" himself up for the expected debate on the Mid-year Budget Review in Parliament today.

Inflation, others

The Ranking Member on the Finance Committee of Parliament, Isaac Adongo, questioned how the Finance Minister could claim to have turned the corner when inflation was 42 per cent, saying by the end of the year, gross international reserves would be 0.8 months.

"You have turned the corner when the Governor of the Bank of Ghana (BoG) and the Monetary Policy Committee (MPC) just recently increased monetary policy rate to 30 per cent?

"You have turned the corner when the BoG has reported that the cedi has depreciated by 30 per cent?" he asked.

Mr Adongo said the Finance Minister was not even near the corner, let alone turning it.

He alleged that the central bank recorded a negative reserve to the tune of GH¢70 billion.

Mr Adongo further alleged that the Prudential Reserve, which is money saved by commercial banks with the central bank, had been wasted.

"All the money they have borrowed from abroad in foreign currencies to support the cedi is gone.

As a matter of fact, if you even take away government debt that they have incurred of GH¢48 billion, you will still see that the BoG has a hole of GH¢22 billion," he said.

Mr Adongo said what this meant was that the BoG was not fit for purpose because it could not undertake monetary policy without printing money.

He said the BoG’s audited account was probably released last Friday with the belief that it would be overshadowed by yesterday’s Mid-year Budget Review presentation by the time people had returned from the weekend’s social commitments.

He said the issue would be revisited.