NDC 2024 Manifesto: Here are the false and half true claims on the economy

In its 2024 manifesto, the National Democratic Congress (NDC) has highlighted several achievements it claims to have accomplished by the end of its administration in 2016. Central to these claims is the party’s assertion that the Mahama-led government left behind “a remarkable legacy of investments that set Ghana on the path to economic transformation and sustainable development”

Fact-Check Ghana has verified these claims made in the manifesto, relying on data from credible sources such as the Ghana Statistical Service, Ministry of Finance, and the International Monetary Fund (IMF) and presents the facts below.

Claim 1: Delivered a sound economy marked by a sustainable public debt with a debt-to-GDP ratio of 55.6%.

Verdict: False

Explanation: The Finance Committee of Parliament in its  Annual Debt Management Report for the 2016 Fiscal Year noted that while Ghana had significantly reduced its debt burden to about 26% of Gross Domestic Product (GDP) following the implementation of the Highly Indebted Poor Country (HIPC) initiative, the country’s debt levels rose to 72.5% of GDP in 2016- significantly higher than the 55.6% claimed by the NDC.

The Ministry of Finance corroborated this in its Annual Debt Management Report stating that Ghana’s debt-to-GDP ratio increased from 72.2% in 2015 to 72.5% in 2016.

Moreover, the Institute for Fiscal Studies (IFS) reported that Ghana’s debt-to-GDP ratio surged to 73.3% in 2016. According to the IFS, from GHS9.8 billion in 2008, Ghana’s debt ballooned to GHS35.1 billion by the end of 2012 (48.4% of GDP), and by the close of 2016, it skyrocketed to GHS122.6 billion, 73.3% of GDP.

Similarly, the International Monetary Fund (IMF) noted in its  Staff Report for the 2017 Article IV Consultation, that Ghana’s total public debt reached 73.9% of GDP in 2016, marking a rise from 66.6% in 2014 and 72.9% in 2015.

Based on the assessments from the aforementioned sources, the NDC’s claim of leaving office with a debt-to-GDP ratio of 55.6% is false. The facts above place the actual figure between 72.5% and 73.9% in 2016.

Claim 2: A stable credit rating of B-

Verdict: Half true

Explanation: Investiopedia explains a country’s credit rating as a measure of its creditworthiness and how reliable it is in repaying its debts. This rating serves as a determinant for investors, helping them assess the risk involved in lending to a country or investing in its bonds.

Higher ratings, such as AAA, indicate financial stability and the ability to pay debts while lower ratings such as CCC/CCC+ or Caa1, indicate higher risk or financial instability. These ratings affect borrowing costs, access to international capital, foreign investment, and interest rates.

Ghana’s credit rating has been assessed by three major international agencies since 2003 — Moody’s, Standard and Poor’s (S&P), and Fitch— each providing independent evaluations of the country’s financial health. Over the years, all three agencies have assessed Ghana’s credit rating. The NDC’s manifesto asserts that it maintained a stable B- credit rating during its administration.  At the end of 2016, the Fitch and S&P had assigned Ghana a B- rating while Moodys assigned Ghana a B3 rating.

Below are the credit rating assessments by the various agencies over the years according to publications on Ghana’s credit rating report on Fitch’s website, the Ministry of Finance’s Annual Debt Management Report and a factsheet by the United Nations Office of the Special Advisor on Africa.

Fitch

In 2004, Fitch, an international credit rating and research agency dual headquartered in New York and London rated Ghana’s credit rating as B level. The agency upgraded the rating to B+ in 2005, an indication of financial stability. The rating from 2005 stagnated until October 2013 when Fitch downgraded Ghana from B+ to B, indicating rising fiscal challenges. This credit rating did not change until 2022 when it dropped to B-, another downgrade indicating a negative fiscal outlook according to Fitch’s standards.

Standard & Poor’s (S&P)

S&P’s assessment of Ghana saw a similar pattern. Starting at B+ in 2009, the rating slipped to B by 2010 and fell back to B- in 2015. The rating did not change in the subsequent years, indicating a negative outlook on the country’s credit standing.

Moody’s

Moody’s also pegged Ghana’s credit rating at B1 from 2009 to March 2014, indicating a positive and stable outlook. However, in September 2014, Ghana’s credit standing dropped to B2 and subsequently to B3 in 2015 and 2016.

The NDC’s claim that the Mahama-led government is partly true. In 2016, S&P rated Ghana at B- with a stable outlook. However, assessments from all three credit rating agencies show a decline in Ghana’s creditworthiness during Mahama’s tenure, with ratings slipping from B+ to B- or lower. The data above points to growing fiscal challenges.

While the claim that Ghana attained a B- rating in 2016 is true, the broader context shows a decline in Ghana’s credit rating under the Mahama administration from previous years.

Claim 3: …a low budget deficit of 6.1%, declining inflation rate that was approximately 15%.

Claim 3a: a low budget deficit of 6.1%

Verdict: False

Explanation: A budget deficit occurs when a government’s expenditure surpasses its revenue, mostly generated from taxes and other fees.

The NDC claimed in its manifesto that it left behind a budget deficit of 6.1% in 2016. However, multiple data sources contradict this claim. According to the Budget Statement and Economic Policy for the 2017 Financial Year, Ghana’s overall budget deficit for 2016 stood at 8.7%, amounting to GHS14,731.6 million, “indicating a higher than expected budget deficit outturn, both in nominal terms and in per cent of GDP”, the budget statement further read.

Additionally, the IMF in a staff visit report to Ghana, reported that the 2016 fiscal deficit was 9% of GDP, rather than the targeted 5.25% or 5¼% envisioned under Ghana’s IMF-supported programme. The IMF attributed the deficit to poor oil and non-oil revenue performance combined with excessive government spending.

Claim 3b: declining inflation rate that was approximately 15%.

Verdict: Half true

Explanation:

Data from the Ghana Statistical Service indicates that inflation stood at 15.4% in December 2016, a percentage lower than November’s 15.5%. The Bank of Ghana (BoG) also confirmed that inflation stood at 15.4% by the close of 2016. Even though, the figures from the two institutions are not approximately 15%, they are close.

Claim 4: A stable currency with a depreciation rate of 9%

Verdict: False

Explanation: Per the Ministry of Finance’s Annual Debt Management report, in 2016, the interbank exchange rate of the cedi depreciated by 9.6% against the US Dollar, and 5.3% against the Euro in 2016 while appreciating by 10.0% against the Pound Sterling. This finding is further supported by the Securities and Exchange Commission’s 2016 Annual Report.

The Bank of Ghana also confirmed these figures in its 2016 annual report, noting that on both the inter-bank and the forex bureau markets, the cedi depreciated by 9.6 per cent and 5.2 per cent against the US dollar and the euro respectively, but appreciated by 10.0% against the Pound. This marked an improvement from 2015, when the cedi depreciated by 15.7% against the Dollar, 11.5% against the Pound, and 6.2% against the Euro. Evidently, the NDC’s claim of delivering a 9% inflation rate before exiting office is inaccurate.