NDC’s “Setting the Records Straight” Forum: Six Claims Fact-checked – Only One Entirely True

Hon. Fiifi Fiavi Kwetey delivered a presentation at the first in the series of NDC’s “Setting the records straight” forum at the party’s headquarters in Accra on September 22, 2016. During this presentation, several claims were made. MFWA fact-checked six of these and found that only one was entirely true. Other claims were found to be completely false, half true, mostly true, and true but misleading. The full details are presented below.

Claim 1: NPP ended the year 2008 with inflation at 18%…The Mills/Mahama NDC government…achieved the unprecedented record of nearly 3 continuous years of single digit inflation.

Verdict: Entirely True

Explanation: According to the Consumer Price Index Release for December 2008 by the Ghana Statistical Service, inflation rate stood at 18.13 per cent.

Also, starting from June 2010, where the rate of inflation dropped to 9.52%, inflation remained in the single digit region up to January, 2013 when inflation was at 8.8%. In February 2013, inflation however rose to 10%. This meant that there was single-digit inflation for 32 consecutive months, representing 2 years and 8 calendar months.

Claim 2: The 11% budget overrun which the NPP recorded in the year 2008 remains the highest fiscal slippage from 1993 to date.

Verdict: Mostly True

Explanation: This specific claim about Ghana’s budget deficit overrun was found to be mostly true after checks were made from Ghana’s annual budget statements. In the 2008 Budget Statement, under the section titled, “Macroeconomic Policies, Strategies and Targets for 2008”, the then NPP government set an overall budget deficit target of 4.0 per cent of GDP.

Subsequently, the 2009 Budget Statement in accounting for the previous year’s budget deficit stated that, “The overall budget deficit excluding divestiture hit a high of GH¢2,557.6 million, equivalent to 14.9 of GDP. Adding divestiture receipts, however, reduced the deficit to GH¢1,982.9 million, equivalent to 11.5 per cent of GDP.”

This meant that indeed depending on whether one includes divestiture receipts, the budget deficit could either be either 14.9% or 11.5%. The latter effects of the rebasing of the economy in 2010 were not considered in the analysis of the budget deficit overrun. Also, checks made from recent budget statements between 1993 and 2015 indicate that the difference between the targeted budget deficit and the actual performance recorded in 2008 is in fact the highest in recent times.

Claim 3: The Non-performing NPP did not build a single bungalow for basic schools, and senior high schools  in eight years.

Verdict: Completely False

Explanation: In 2004, the NPP government started the Model School Project. This project was aimed at equipping at least one senior high school in one district to the level of the standard senior high schools. At least thirty schools were completed. The schools had all the existing facilities renovated while new facilities such as additional class rooms, dormitory blocks, assembly halls, science resource centres were built. In Krachi Senior High School, for instance, two new 2-storey boys’ dormitory blocks were built. A new bungalow was also built for the headmaster. Additionally, it has been confirmed that between  2003 and 2005 government built  four bungalows at the Kumasi Anglican Senior High School.

Claim 4: NPP’s incompetent handling of the economy and the huge arrears left at the close of 2008 caused the non-performing loan ratio in the banking sector to reach 22%.

Verdict: Completely False

Explanation: Data from the World Bank and the IMF’S financial stability report indicates that the bank Non-Performing loans to total gross loans as at 2008 was 7.677% and not 22 as the minister stated.  In fact, it was in 2002 that the NPL was 22.7 and as of 2015 it was 14. 674.

Claim 5: Even from 2013 to date, but for a 5 month period which started at January 2016 up to May, inflation has remained below the 18% the NPP government left inflation when they were leaving power.

Verdict: Half True

Explanation: To verify this claim, we had to examine all the monthly releases of inflation rates by the Ghana Statistical Service from January 2013 to August 2016. It was found that indeed inflation rates had generally been below the 18% referred to by Hon. Fiifi Kwetey. However, instead of the five months as claimed by Hon. Kwetey, inflation rates had gone beyond the 18% mark in six months (January – June, 2016).

Claim 6: In the 8 years of the Mills/Mahama administration, the agricultural sector has not experienced the -1.7% growth that Ghana suffered in 2007, under the NPP government.

Verdict: True but Misleading

Explanation: Hon. Fiifi Kwetey made this claim to make the point that the NDC government has fared better with the agricultural sector than the former NPP government. Our checks from the Ministry of Food and Agriculture (MOFA) and the World Bank data on Ghana confirmed that indeed the agricultural sector had experienced a decline in growth of -1.7% in 2007. However, this fact belies a more complex trend of performance of the agriculture sub sector.

Firstly, the negative growth experienced in the year 2007 was likely to be influenced by the extreme floods and droughts experienced in that year which devastated many farms and plantations.

To carry out a more holistic assessment of the performance of the agriculture sub-sector under both the recent NPP and NDC governments, we looked at the sector’s contribution to overall national productivity (GDP) and the annual growth rates of the sub sector. A table of these figures is presented below.

Table: Agricultural Sector’s GDP Contribution & Growth Rates

Source: World Bank & Ministry of Food and Agriculture. *At 2006 constant prices

As can be seen from the table above, the declining fortunes of the agricultural sub-sector was more apparent under the NDC government, with an average GDP contribution of 25.71% and growth rate of 4.06% as against NPP’s record of an average GDP contribution of 36.73% and growth rate of 4.54%.

So, though Hon. Fiifi Kwetey’s claim about the recent NDC government never reaching the -1.7% recorded by the NPP government in 2007 is accurate, it ignores the fact that the agricultural sector in 2007 was hit by severe floods and droughts. Also, Hon. Kwetey’s claim does not take cognizance of the fact that both the average GDP growth and contribution of the agriculture sub sector was higher under the NPP than the NDC government.