“If you sum the cost of all the loan financed projects listed in the green book (even including those with artistic impressions) it is less than $7 billion.
Meanwhile, the government has borrowed the equivalent of $37 billion so where is the rest of the money?” Dr Bawumia queried.
The NPP vice presidential candidate made the comments when he addressed a National Financial Literacy and Investment Summit organised by the University Students Association of Ghana (USAG) at the University for Development Studies, Wa Campus in the Upper West Region, under the theme: “The Role of Financial Discipline and Investment in National Development.”
Investment In Infrastructure
According to Dr Bawumia, the NDC government is attempting to hoodwink Ghanaians with claims of massive infrastructural investments since “investment in infrastructure has actually been on the decline.”
Dr Bawumia, an economist of international repute, underscored: “It is important to note that we measure investment in an economy relative to GDP and not just in nominal terms. This is a point that is unfortunately lost on this NDC government and their communicators.
“If as a country your investment in infrastructure relative to GDP is declining, then your growth is likely to decline. This background is very important to understand what is happening in Ghana today. The evidence shows that notwithstanding the massive increase in the debt stock, capital expenditure as a percentage (%) of GDP has actually been on the decline from 9.1% of GDP in 2008 to 4.1% by 2015. Capital expenditure as a percentage of GDP averaged 11% for 2001-2008 (without oil) while that for 2009-2015 has averaged 5.7% (with oil).
Borrow To Consume
He quoted the Managing Director of the International Monetary Fund (IMF) as saying that most of Ghana’s borrowing had been used for consumption and not for investment.
“The overpricing of contracts, corruption and the absence of value for money considerations are partly responsible for this,” he said.
Kumasi Airport Runway
Dr Bawumia said for example that a runway rehabilitation alone at Kumasi airport cost this country $23.8 million whereas a proposed airport at Ho is estimated at $25 million; and asked sarcastically, “was the runway in Kumasi paved with gold?”
He insisted that given the resources at its disposal, one should expect at least four times the quantum of investment that the NDC claims to have undertaken, saying, “The close to $30 billion of borrowing that was not used for projects could have been used for other critical sectors of the economy.
He mentioned the rail network from Accra to Paga, the water problems, energy, many major road projects in each region, transformation of agriculture particularly in the Northern Regions, Afram Plains and others through investment in machinery, irrigation and dams as some of the projects that the huge amount of money could have covered.
He also said the amount could have been used to build one world class hospital in each region, buy at least 1,000 ambulances, set up factories with the private sector across the country to add value to raw materials and create jobs, equip existing health and education institutions with state-of-the-art facilities as well as build an additional 600 of the Senior High Schools the government is currently trying to build.
According to Dr Bawumia, the reason why he insists the NDC government is attempting to hoodwink Ghanaians with claims of massive infrastructural investments is that “Most of these projects are over-priced as a result of the single source procurement method, which has become the procurement method of choice for this government, as we saw in the SADA, GYEEDA, Karpowership, SMARTTYS bus branding, etc.”
He articulated, “I would like to see for example explanation from the government quantity surveyors of the costing on the Kumasi airport runway for $23.8 million. However, you and I know that they would not explain because they cannot explain.”
He said all previous governments, especially the NPP, undertook infrastructural projects but the NDC is making it look like it has done what nobody did, saying, “The real fact is that the NDC has no real achievements to point to outside the undertaking of some projects; hence, their resort to mediocrity.”
Dr Bawumia also said infrastructural investment was not supposed to be for its own sake but to increase productivity and production in the economy. “If you have indeed undertaken massive and unprecedented infrastructural investment, then why is the economy collapsing?
“Why is the NHIS in trouble? Why is unemployment on the increase? Why are businesses collapsing? Why is agricultural growth stagnant? Why is manufacturing growth negative? Why is the government having difficulty meeting statutory payments? Why the high interest rates? Why the massive exchange rate depreciations? Why are the SADA guinea fowls flying to Burkina Faso? Why the massive increase in utility prices? Why the withdrawal of teacher and nursing training allowances? Why all this suffering in the land?” he asked.
Source: Daily Guide