Ahead of the 2020 elections in December, the National Democratic Congress (NDC) launched their manifesto, the ‘People’s Manifesto’ on Monday, 7 September 2020.
At the launch, the presidential candidate of the party, John Dramani Mahama, in his introductory speech (1:59:22- 2:06:45 of the recorded Facebook live video) was heard making a number of claims centred mainly on the economic state of Ghana and on a government’s COVID-19 management.
A transcript of Mahama’s speech which captures the context in which the identified claims were made reads:
“…In many cases, countries considered relatively less advanced with smaller economies are emerging more resilient and less affected by the global shocks than some countries that are considered advanced. The case of Vietnam, a relatively smaller country bordering China, and therefore closer to the original source of the Coronavirus pandemic has survived much better with relatively less infections and deaths than known global superpowers...Excessive borrowing over the last four years has placed Ghana in a high debt risk category, with absolutely nothing to show for it…”
Consequently, Dubawa accessed the available facts concerning some identified claims, in producing its attendant verdicts.
Claim 1: Vietnam has survived the Coronavirus pandemic much better with relatively lesser infections and deaths than known global superpowers
Verdict: Reports from the WHO, CDC, COVID-19 data sites and media show that Vietnam has recorded relatively lesser infections and deaths compared to the known global superpowers.
The countries largely referred to as the global superpowers are the five permanent members of the UN Security Council namely the United States of America (US), the United Kingdom (UK), Russian Federation, China and France.
Dubawa accessed the statistics for the population, confirmed cases/infections and deaths as at 7 September 2020, recorded for Vietnam, US, UK, Russian Federation, China and France tabulated below:
Confirmed case & deaths: WHO
Comparatively, from the tabulated statistics, Vietnam, which has a population higher than the UK and France, has recorded smaller rates of infection and death than the two countries.
Moreso, the Vietnam Coronavirus tracker also reveals that out of the 1,059 confirmed cases, there have been 902 Covid-19 recoveries in Vietnam, with no critical cases treated in Intensive Care Unit and an 84% recovery rate of the total cases.
In June 2020, the Centre for Disease Control (CDC) described Vietnam’s response to controlling the pandemic as an excellent credit to the country’s leadership strategies.
“Vietnam has excelled in controlling COVID-19 through strong leadership and coordination, rapid case detection and isolation, aggressive contact tracing, and strict quarantine measures,” the CDC said.
Claim 2: Excessive borrowing over the last four years has placed Ghana in a high debt risk category
Verdict: Even though Ghana is in high-risk debt distress category due to excessive borrowing, it is not as a result of events of the last four years. Ghana has been in this category since 2015 when an IMF and World Bank report published in April 2015 concluded Ghana to be so on account of breaches in the debt-service to revenue ratio.
Two documents were accessed to ascertain this claim.
The first document titled Joint Ghana World Bank-IMF Debt Sustainability Analysis document dated December 2019, an analysis of Ghana’s joint bank-fund sustainability, shows that Ghana’s risk of external debt distress and overall risk of debt distress were truly both high.
“External and overall debt are at high risk of debt distress… Nonetheless, debt is assessed as sustainable thanks to favourable market access, the authorities’ commitment to macroeconomic stability and fiscal discipline, and the potential for steeper than assumed fiscal consolidation. In the short term, fiscal discipline is necessary to ensure debt sustainability and maintain market confidence, but external factors, including worsening global risk sentiment, still pose significant risks,” the IMF document reads.
However, Mahama’s assertion that this is a result of excessive borrowing specifically from over the last four years is inaccurate as we found Ghana’s categorisation by the IMF was since 2015.
An IMF Ghana report on the ‘Request For A Three-Year Arrangement Under The Extended Credit Facility’ (pg13&14) published in April 2015 also judged Ghana’s debt at a high risk distress.
“The Debt Sustainability Analysis (DSA) concludes that Ghana is at a high risk of debt distress, on account of breaches in the debt-service to revenue ratio over 2015–17 and after 2021. The authorities are committed to limit their borrowing plans to loans with a minimum grant element of 35 per cent, with possible exceptions in line with the debt limits policy… Bank of Ghana gross financing to the budget in 2015 will be limited to 5 per cent of previous year’s revenue, using only marketable financial instruments”, the report read.
Another document titled, The fall and rise of Ghana’s debt jointly published by the Integrated Social Development Centre Ghana, Jubilee Debt Campaign UK, SEND Ghana, VAZOBA Ghana, All-Afrikan Networking Community Link for International Development, Kilombo Ghana and Abibimman Foundation Ghana in October 2016 was accessed to verify the claim.
The document, in analysing how Ghana had at the time, ‘fallen in a new debt trap’, also shows that Ghana was categorised as a high risk of debt distress by the World Bank in 2015.
“In April 2014 Ghana was assessed as at moderate risk of debt distress but ‘approaching high-risk levels’. At the next review in March 2015 this changed to being confirmed as at “high risk of debt distress”. Yet, seven months later in October 2015, the World Bank broke its own rules based on its own assessment by giving a guarantee for (high-cost) bonds for a country rated as at high risk of debt distress,” the document reads.
Therefore, even though Ghana is in a high risk of debt distress category due to excessive borrowing, it is not a matter of the last four years as Mahama claimed. Ghana has been in this category since 2015 when an IMF and World Bank report published in April 2015 concluded Ghana to be so on account of breaches in the debt-service to revenue ratio.
Conclusively, from the claims identified in Mahama’s introductory speech at the NDC Manifesto launch 2020, one was true and another was false.