Claims: Ghana‘s worsening economic difficulties and poor performance of the cocoa sector
Source: Fifi Fiavi Kwetey
Verdict: 2 TRUE, 1 FALSE
Researched by David Yovo-Ofori
The National Democratic Congress (NDC) insists Ghana’s economic woes cannot be entirely blamed on the COVID-19 pandemic and the Russia-Ukraine war as being portrayed by the government.
Speaking at a press conference on February 14, 2024, the NDC General Secretary, Fifi Fiavi Kwetey said Ghana’s worsening economic difficulties was because government continues to mismanage key sectors of the economy.
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But how true are the claims?
Claim 1
“As early as 2019, the budget deficit has already reached 7%,” Fifi Fiavi Kwetey said.
Fact-Check
The Ministry of Finance’s end-of-year report on the budget statement and economic policy for 2019 indicated that Ghana recorded a fiscal deficit of less than 5%.
Point number 15 on Page 3 of the budget read by the Finance Minister, Ken Ofori Atta, stated: “We have contained the fiscal deficit below 5 percent of GDP for three consecutive years, and the end-September 2019 deficit amounted to 4.5 percent of GDP.”
Meanwhile, data from the World Bank and the Ghana Revenue Authority (GRA) shows that Ghana recorded an overall deficit of 7% at the end of 2019.
“The headline fiscal deficit was 4.7 percent of GDP in 2019, while the overall fiscal deficit, including financial and energy sector costs, reached 7 percent of GDP, the same level as in 2018,” the 2019 annual report of the Ghana Revenue Authority said.
In a joint World Bank-IMF Debt Sustainability Analysis on Ghana, the Bretton Woods Institutions highlighted that Ghana’s deficit reached 7% in 2019.
“The overall fiscal deficit is expected to reach 7 percent of GDP in 2019, reflecting financial costs and unexpected energy amounting to 2.3 percent of GDP,” the report said.
Verdict
The claim is rated true.
Claim 2
“In 2019, Debt-to-GDP rose and was already above 60%.”
Fact-Check
On January 13, 2022, the Ministry of Finance (MOF) responded to a widely circulated Bloomberg article titled “Ghana Debt Moves Deeper into Distress as Investors Lose Patience.”
The MOF press release stated: “In 2020, Ghana’s GDP grew by 0.4% due to the impact of the Covid-19 Pandemic. The financing of additional COVID-19-related expenditures, coupled with revised revenue targets, resulted in an increase in the debt-to-GDP ratio from 62.4% in 2019 to 76.1% in 2020.”
Furthermore, the Annual Public Debt Report for the 2019 Financial Year, submitted to Parliament on March 30, 2020, by Ken Ofori-Atta, Minister for Finance, indicated on page (xiv) “as of end-December 2019, the total gross public debt outstanding stood at GH¢217,990.7 million. The debt-to-GDP ratio at end-December 2019 was 63.0 percent, up from 57.6 percent at end-December 2018. This increase reflects the impact of the financial and energy sector bailouts.”
Also, the fourth Quarter of 2019 Public Debt Statistical Bulletin by the Ministry of Finance in March 2020 said: “The public debt stock increased from GH¢208.56 billion (US$38.74 billion) in September 2019 to GH¢216.7 billion (US$39.12 billion) at end-December 2019, which is 63.01 percent of GDP.”
Verdict
The claim is rated TRUE.
Claim 3
“Cocoa Production, which was at 960,000 metric tonnes in 2016, has now declined to below 500,000 metric tonnes.”
Fact-Check
The 48th Annual Report and Financial Statements from the Ghana Cocoa Board, specifically on page 10 under the sub-heading Cocoa Purchases Performance of Licensed Buying Companies (LBCs), “Cocoa purchased for the 2016/17 season was 969,540 tonnes, indicating an increase of 24.61%, compared to the 778,043 tonnes recorded in 2015/16.”
Furthermore, the Cocoa Market Report published by the International Cocoa Organization (ICCO) in April 2023, on page 4 under the sub-heading Supply of Cocoa Beans for 2022/23 Currently Lags Behind 2021/22, indicated that “the latest information indicates that the volumes of graded and sealed cocoa beans purchased in Ghana were estimated at 576,738 tonnes from October 2022 to March 2023, up by 10.1% (+53,013 tonnes) compared with 523,725 tonnes purchased during the corresponding period of the previous season.”
Verdict
The claim is rated FALSE.
