The World Bank Country Director for Ghana, Pierre Frank Laporte, has vindicated Vice President Dr Mahamudu Bawumia over his ‘quadruple whammy’ assertion listing the causes of the NPP government’s precarious financial position.
Dr Bawumia, during a lecture on the economy in Accra, listed four factors which handicapped the NPP government – the COVID-19 pandemic, the Russia/Ukraine conflict, the $7bn financial sector clean-up and Ghc 17bn of energy sector debt inherited from the Mahama administration – dubbing all four the quadruple whammy!
Speaking during a recent interview, Pierre Frank Laporte vindicated Dr Bawumia as he pointed out what he labelled as losses from the energy sector, as well as the impact of COVID, as heavily handicapping the Ghanaian economy.
“The big issue has been on the fiscal side. Before the current crisis happened, we observed certain challenges on the budget side that really has been the area more hit by everything. Also where actions are required now to deal with them. For instance, on the revenue side, we have always been saying that this is an area where Ghana should do better. We are encouraged by the fact that this should be one of the areas for potential programmes and support from the World Bank. The problem is fiscal, not just revenue,” Laporte said.
He added: “The problem is that there are also spillovers from other sectors, or instance, the energy sector. There are about one billion dollars going to the energy sector because of losses. The sector itself is not financially viable and to keep it going you have to subsidize. Actions are required. Of course with COVID-19, the general business environment is been a bit more difficult.”
The NPP government has supervised over an interrupted period of power production, a stark departure from the energy sector crisis (dumsor) that plagued the previous Mahama administration.
This is due to the NPP government’s unflinching commitment to settling power producers, including a nearly $1bn annual expenditure on power the country doesn’t need, stemming from contracts the Mahama administration signed.
Meanwhile, Laporte in the same interview again praised the NPP government for using COVD-19 funds received from the World Bank for exactly their intended purposes.
“We know each and every dollar that is spent and accounted for. We have done audits.
“There are always a few things here and there and some documentation that needs to be followed, but largely speaking, we are very satisfied that our resources were spent in line with the procurement requirements that existed,” he said.
The World Bank gave Ghana $430m at the height of the pandemic to help deal with its aftereffects.
Another $130 million was later expended to Ghana for the purchase of vaccines.