Ato Forson engaging in speculation, propaganda – Deputy Finance Minister

Deputy Finance Minister, John Kumah, has dispelled predictions by a Ranking Member on the Finance Committee of Parliament, Cassiel Ato Forson that 2022 will be hard for Ghana’s economy.

According to Mr Kumah, the negative outlook presented by Dr Forson in a Facebook post is not backed by credible data.

“Often, you expect those who are well informed about development in this economy to speak the truth backed by facts. It unfathomable to think that a former Deputy Minister of Finance could be this pessimistic, speculative and propagandist on important issues concerning the economy of Ghana.

“It is therefore important I state categorically that all the speculations by Hon Ato Forson are his own creation and are not supported by data,” John Kumah stated on Facebook.

The opposition National Democratic Congress (NDC) Member of Parliament said a series of decisions taken by the government since it assumed power will make 2022 a tough one for Ghana’s economy.

The lawmaker for Ajumako Enyan Esiam Constituency in the Central Region posted on Facebook on January 2, 2022, that inflation will increase, driven by at least a 30% increase in the prices of goods.

READ ALSO: 2022 is year of economic misery, inflation for Ghana – Ato Forson predicts

But in a rebuttal, Mr Kumah said Ghana’s economy is projected to grow at 4.9% even with Covid-19 challenges.

“The government is turning around the economy back to the era of high growth before COVID-19 pandemic came to our shores,” he said.

John Kumah stated that it is not accurate that prices of goods will increase by circa 30% since there is no evidence to back this speculation.

“On the cedis performance, I'm surprised at Ato's submission.  As at end December 2021, the cedis had depreciated by 3.63% compared 3.93% same time 2020. This represents one of the lowest depreciation seen in the currency in the last decade. The Pound has only deprecated by 1.64% compared to 7 08% in 2020. The cedi as at end December 2021 had APPRECIATED against the Euro by 4.48%. Certainly, it is out of place to speculate about a currency with this sterling performance. Government is confident that the cedi will hold against the major trading currencies in 2022 given all the innovative currency management policies introduced including the forward auction,” the Deputy Finance Minister explained. 

Read John Kumah’s full rebuttal below.

Often, you expect those who are well informed about development in this economy to speak the truth backed by facts. It unfathomable to think that a former Deputy Minister of Finance could be this pessimistic, speculative and propagandist on important issues concerning the economy of Ghana. It is therefore important i state categorically that all the speculations by Hon. Ato Forson are his own creation and are not supported by data.

Indeed, the economy is expected to grow at 4.9% even with ravaging COVID-19. The government is turning around the economy back to the era of high growth before COVID-19 pandemic came to our shores.

1. It is not true that prices of goods are to increase by circa 30% as Hon. Ato is speculating. There is no evidence to back this speculation.
2. On the cedis performance, I'm surprised at Ato's submission. As at end December 2021, the cedis had depreciated by 3.63% compared 3.93% same time 2020. This represents one of the lowest depreciation seen in the currency in the last decade. The Pound has only deprecated by 1.64% compared to 7 08% in 2020. The cedi as at end December 2021 had APPRECIATED against the Euro by 4.48%. Certainly, it is out of place to speculate about a currency with this sterling performance. Government is confident that the cedi will hold against the major trading currencies in 2022 given all the innovative currency management policies introduced including the forward auction.
3. On fuel, it is important to state that Hon. Ato's opinion on potential increase in fuel is not supported by any data. Indeed, the Office of President on 31st December 2021 directed the Ministry of Finance to extend the withdrawal of Price Stabilisation and Recovery Levies on Petrol, diesel and LPG for additional one month. Though fuel prices response to a number of factors, Government is determined to cushion consumers as and when necessary.
4. On taxes, let me intimate that government is not introducing any new taxes as being speculated. The e-levy as was announced by the Finance Minister is the only levy before Parliament for consideration.
5. On interest rate, Hon. Ato's expectation of a hike is untenable. Following the banking sector reforms, our banks have been well positioned to lend to credit worthy clients at cheaper cost. Though NPLs have increased due to COVID-19, Government is very certain that interest rates will not go out of the roof. Government through programmes such as YouStart and GhanaCARES will support individuals, businesses and institutions with cheap credit to help them realise their dreams.
6. On domestically focused financing, Hon Ato's view that such a approach is bad for the economy is laughable. Our domestic market has proven capable of meeting the funding needs of government. Through the numerous policy interventions in the market, the market has now become solid and ready to provide the funding needed to support the budget. In doing so, government in line with the Debt Management Strategy is mindful of the cost-risk trade off and will at all times ensure that fine balance is maintained and to protect the interest of the Republic.