Dr Michael Ayamga-Adongo, Head of Department for Applied Economics at the University for Development Studies (UDS), has revealed that there were signs the country’s economy had taken a downturn driven by excessive borrowing long before the emergence of the COVID-19.
He said although COVID-19 had impacted on the economy, considering the lockdown, border closures, reduced trade among others, the economy was already bedeviled by excessive borrowing, high government expenditure, that exposed it to economic shocks.
Dr Ayanga-Adongo, an Economist, emphasised that “rising debt owed to power producers in the energy sector, estimated at over US$ 3billion, and another US$ 3billion in bonds to pay customers of insolvent banks in the financial sector clean-up, were early signs of a cracking economy.”
He was speaking to the Ghana News Agency in reaction to the State of the Nation Address (SONA) delivered by President Nana Akufo-Addo on Wednesday, March 30.
Dr Ayamga-Adongo said the President needed to paint a true picture of the situation for the citizenry to appreciate challenges confronting the country.
He reiterated that the President could have seized the opportunity to tell the citizens the reality about the economy to build consensus to rally them behind the core objectives of saving the economy.
He described the country as bankrupt and said it could not do any meaningful project without borrowing, adding “No one wants to lend to us, and no one is interested in what we offer on the capital market.”
Dr Ayamga-Adongo recommended the urgent need for government to raise revenue to finance its agenda, stating that it could only be done by unifying the citizens.
He bemoaned the posture of the President in addressing matters of national concerns and said the President must avoid campaign talks in times like these emphasising “The President behaves as if he is on a campaign trail and that is not helping matters.”
President Akufo-Addo presented the SONA on Wednesday, where he touched on the general performance of the country, and looked deep into economic, political and social position for the year under review.