The Tale of Three Finance Ministers
When it comes to management of Ghana’s economy from 1981 to date, it is very obvious which tradition has the bragging rights to doing a much better job and which tradition must just shut up and remain silent.
The Rawlings era saw the collapsing of Ghana’s economy with the cedi depreciating against the dollar by 245,355% from ¢2.75 to the dollar in 1981 to¢6,750.00 to $1.00 in 2000.
Ghana had to seek for debt relief in the HIPC Debt Relief Initiative and in June 2000, the government presented the Interim Poverty Reduction Strategy Papers (I-PRSP) to the IMF as a pre-requisite to access the HIPC Initiative.
This was signed by finance minister Peprah and in the I-PRSP, there was a time table which clearly indicated that Ghana was going to declare HIPC in April 2001.
The country was dead broke that NDC’s Spio Garbrah in mocked lamentation wondered where the new government of the NPP under President J.A. Kufuor was going to get money from to pay salaries.
This presentation is to evaluate three finance ministers who at one point in time where either censured or demands were made for their exit from office or both. There are Richard Kwame Peprah (1995 to 2000), Seth Terkper (2013 to 2016) and Ken Ofori-Atta, 2017 to date. Among them, we will be able to judge, who is the best, the worst and the most incompetent, in this submission.
Hon. Richard Kwame Peprah: In 1995, H.E. Jerry John Rawlings appointed Richard Kwame Peprah as the finance minister of Ghana. Peprah took over the economic and financial management of this country when in the previous year, 1994, annual inflation rate was 24.87%. Under Peprah, the annual inflation hit 59.46% in 1995 and in Election year, 1996, the rate went down to 46.56%.
In 1997, Kwame Peprah was re-appointed as finance minister and inflation went down to 27.80%, then to 14.62% in 1998 and down to single digit in 1999 when it recorded 4.87%. In Election year 2000, inflation shot up to 40.24%, indicating that the NDC finance minister did a lot of overspending, probably to buy votes.
When Peprah took office in 1995, the forex rate was ¢1,450.00 to $1.00. His six years in office, found the cedi, falling deeper by 366% to ¢6,750.00 to $1.00. In just six years, the cedi went up by ¢5,300.00 to the dollar.
Kwame Peprah put Ghana through harsh economic conditions which were self-inflicted due to gross mismanagement. Ghana at that time went borrowing to service loans, not to pay off existing debts, but to pay interests accruing on loans.
Peprah took over as finance minister when Ghana’s external debt was $5.47 billion and when he ended office, Ghana’s external debt rose by 23.3% to $6.744 billion.
To save Ghana, the NPP members in the Second Parliament of the Fourth Republic led by Hon. Konadu Apreku, passed a censure motion in Parliament to facilitate the removal of finance minister, Richard Kwame Peprah, from office.
Kwame Peprah was saved by the then Speaker, Rt. Hon. Justice Daniel Francis Annan, who instead of setting up a committee to deal with the matter first,rather threw the motion to the floor of Parliament, where the NDC majority shot it down.
During that era, nothing wrong done by Rawlings and his administration was considered wrong or bad, and that was how bad Ghana’s economy was run under Jerry Rawlings and Kwame Peprah, with the NDC seeing nothing wrong.
In 2001, Kufuor of the NPP took over as president when external debt was about $6.8 billion. His administration successfully completed the HIPC Initiative arrangements by the NDC and worked economic miracles and even when dumsor came, it was quickly resolved. When the NPP government exited in 2009, the nation’s external debt was down by 30% to about $4.8 billion. The cedi was GH¢1.15 to $1.00.
The NDC came back in 2009 and by 2012, after four years in office, external debt under the Mills/Mahama administration shot up by 154.2% to almost $12 billion ($11,992,686,632.00 to be precise). In 2012, dumsor came back.
Hon Seth Terkper: Then in 2013, Seth Terkper took office as the new finance minister. From that year, right through to 2015, dumsor persisted, businesses started collapsing, life became miserable for households and the whole economy was plunged into a mess.
Under Seth Terkper, Ghana’s external debt went up by 75.6% from $11,992,686,632.00 in 2012 to $21,058,602,219.60 by the end of 2016.Making external borrowing under eight years of NDC go up by 346.3%, from $4,718,475,855.80 to $21,058,602,291.60.
Ghanaians need to recall that during the economic mismanagement under the NDC, and especially under Seth Terkper, who superintended over three years of dumsor, collapsing businesses and other unbearable factors, there was no global economic crunch that affected Ghana. So, could it be lack of experience in economic management or just gross incompetence?
Seth Terkper inherited an annual inflation rate of 11.19%, external debt of $11,992,686,632.00 and a forex rate of GH¢1.91 to $1.00 (December 2012). He guided annual rising inflation rates from 11.64% in 2013, to 17.45% (2016). The forex rate went up 103% from $1.91 to $3.88.
The country had to visit the IMF for the fifteenth time to help restructure our economy.
In 2014, with what the then NDC MPs in Parliament saw as complete misapplication of finance and economic practices on the part of finance minister, Hon Seth Terkper, they approached the then president, H.E. John Mahama with one demand.
They wanted him to sack his finance minister, asap. They were supported by some NDC gurus including some ministers. The then Minister of Information and Media Relations, Hon Mahama Ayariga, in April 2014, stated that the forthrightness of Mr Terkper on the state of the economy was worrying.
President John Mahama flatly refused the demands of the party and maintained Seth Terkper in his position.
Hon. Ken Ofori-Atta: In 2017, a new minister, Ken Ofori-Atta was putin charge of the Ministry of Finance in the new NPP’s Nana Addo’s administration.
Ken came to inherit a country in deep economic mess, annual inflation was 17.45%, external debt stood at $21 billion and forex was GH¢3.89 to $1.00. He dropped inflation down by 29.1% from 17.45% in 2016 to 12.37% in 2017. He then broke into the single digits for four consecutive years, 7.81% (2018), 7.14% (2019), 9.89% (2020) and 9.97% (2021).
Inflation increments in 2020 and 2021 was clearly due to the global pandemic, Covid-19, which collapsed economies of some countries. Then came the Russia-Ukraine war which set off a new wave of global economic crisis and escalated high inflation.
Starting the year with 13.9% inflation, up from 12.6% (December 2021), the country’s inflation kept shooting up until in October, 2022 it registered 40.4%. The average inflation to date is 27.3% and if inflation of November and December come out as October’s, the 2022 annual inflation will be 29.5%, the highest since 2003.
Ken came to inherit a forex of GH¢3.88 to $1.00 and by 2021 the USD shot up 52.1 % to GH¢5.90 to $1.00. This was a much better performance than what Seth Terkper did in four years and without any external economic crunch.
However, due to the dollar showing up strongly against most currencies including the euro, Ghana was badly hit in 2022 with October rates going at GH¢14.05 to $1.00. The external debts under Ken Ofori-Atta went up 33.3% from $21.058 billion (2016) to $28.07 billion in 2021, which was recorded for October 2022. By percentage rates, Ken Ofori-Atta did better, even in borrowing than, Seth Terkper.
Ghana is in bad times, the worst ever,in recent times and is mercilessly crushed down by global economic crisis. Yet under Hon. Ken Ofori-Atta, massive infrastructure developments are on-going, 1D1F and PFJ are among key government flagship projects, not forgetting fighting a global pandemic in such a way as to put Ghana among the top five most efficient nations that tackled the Covid-19 pandemic.
These achievements nonetheless, many Ghanaians are calling for his head. His own party MPs, for the first time in this republic openly demanded his removal, but unlike his predecessor, H.E. Nana Akufo-Addo, agreed to remove Ken from office.
The opposition in Parliament move a censure motion against him and dragged him before the cameras, just to embarrass him and show the world how incompetent he is. But to many, the NDC could not prove anything on that Friday of November 18, 2022.
Between Ken Ofori-Atta, Richard Kwame Peprah and Seth Terkper, it is obvious who is the best among the three. While under Peprah and Terkper, Ghana never faced any global economic crisis, yet our economy almost collapsed. Even cholera an annual epidemic which first hit us in 1970, was not contained by the NDC government in 2014, when over 28,992 people were affected with 243 people, needlessly dying, the highest ever in Ghana, after the 1983 outbreak.
Let us remember the almost four years of dumsor under then NDC, with lots of businesses collapsing.
Ken Ofori-Atta had to handle a new global panic and a war which is wreaking havoc all over the world and yet he has a clean record of no dumsor, regular water supply, projects going on with industrialisation in such unprecedented manner, and equal important, Ghana placing 86th in the world and third in Africa in the 2022 Global Food Security Index. In the midst of this economic crunch, there is food in Ghana.
Among Ken, Richard and Seth, it is very obvious, who is the best, the worst and the most incompetent.
Hon Daniel Dugan
