“Almost all indicators were worse in 2023 than what you inherited in 2016” – IEA to government

The Institute of Economic Affairs (IEA) wants the government to accept responsibility for the poor macroeconomic outcomes during the 2020-2022 period.

According to IEA, the period was influenced by inappropriate policies, such as excessive spending, including on numerous flagship programmes, and excessive and expensive borrowing.

It pointed out that while exogenous shocks, in particular Covid-19 and the Russia-Ukraine war, also played a negative role, they impacted the economy against the backdrop of existing vulnerabilities, which compounded Ghana’s economic crisis.

In reaction to President Akufo-Addo’s State of Nation’s Address, it said almost all the macroeconomic indicators were worse in 2023 than what the government inherited in 2016.

While his description of the macroeconomic situation in 2023 compared with 2022 was right, using 2022 as his base for comparison appears a bit self-serving. This is because 2022 saw record deterioration in many of the indicators. Indeed, the fact is that almost all the indicators were worse in 2023 than what the government inherited in 2016. It is the case that the indicators generally improved during 2017-19 and worsened during 2022-23”.

The IEA commended the government for the improved outcomes during 2017-20119, which occurred on the back of both improved policies, including enactment and observance of the Fiscal Responsibility Act (FRA).

It added that favourable exogenous conditions, such as stable oil prices, also played a positive contributory role.

Government must, however, equally accept responsibility for the poor macroeconomic outcomes during 2020-22, which happened due to inappropriate policies, such as excessive spending, including on numerous flagship programmes, and excessive and expensive borrowing”, it continued.