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Ofori-Atta can’t be vetted until March

BY: Maxwell Akalaare Adombila
Ofori-Atta can’t be vetted until March

What was billed to be, perhaps the ‘mother of all vetting’ will now have to wait until March as the main character of that ‘plot,’ Mr Ken Ofori-Atta, is unwell to face Parliament’s Appointments Committee on February 16 as initially scheduled.

The 62-year-old, who was expected to launch a spirited defence of his tenure as Finance Minister between January 2017 and January this year and to impress upon the committee and Parliament for that matter for another four years, will now do that in two weeks’ time when he is presumed to have recovered from COVID-19 medical complications.

A statement from the Ministry of Finance issued on April 14 said he was due to leave the country that Sunday for the United of States of America (USA) “for a special medical review.”
“After recovering from Covid-19 last December, Mr Ofori-Atta has had medical complications, which doctors advise, require further interventions not currently available in Ghana. He is expected to be away for two weeks,” the three-paragraph statement issued after 10.p.m., said.

No impact

The statement added that Parliament had been notified for a new date to be set.

On February 15, however, an Aid to the minister, Mr Michael Bediako, said in a viral message that Mr Ofori-Atta had arrived in the USA and was “in high spirits.”

An Economist and a researcher with the Institute for Fiscal Policy (IFS), Dr Said Boakye, said although Mr Ofori-Atta’s inability to be vetted on health grounds was a blow, it would not affect the economy.

He said Mr Ofor-Atta’s role as the President’s representative at the Ministry of Finance meant that he had been granted the authority to act for and on behalf of the country and the international and business community would regard him as such until a contrary communication is put out.

He, however, expressed the hope that the minister-designate would be vetted shortly and a decision taken to help fill whatever void that might exist.

High expectations

An investment banker, Mr Ofori-Atta took over as Finance Minister in 2017, making it the first time in his more than 30-year working life that the founder of Databank Financial Services was venturing into the public sector.

Beyond occupying a position of interest, developments under his first tenure raised expectations around his reappointment and the planned vetting that had since been pushed ahead on health grounds.

He funded the closure of nine banks and more than 440 other financial institutions under a overreaching clean up that later cost the public purse more than GH¢22 billion.

Mr Ofori-Atta also sought to securitise a portion of gold royalties under the now controversial Agyapa Royalties deal, raised the debt stock from GH¢122.3 billion in 2016 to GH¢286.9 billion in November last year and retained Databank as one of the transaction advisors to the ministry that he heads.

His family ties with President Nana Addo Dankwa Akufo-Addo as a cousin have also courted unhealthy publicity for him, with most opposition politicians using it against him.

Among other things, these issues were expected to take centre when the Finance Minister-designate takes his turn on February 16 although that expectation has now been dashed, for the meantime.

His position on the health of the economy when he took over in 2017 and its status now also promises to be an issue of interest.

Inheritance

Mr Ofori-Atta inherited an economy bartered by a wobbly power sector, disruptive crude oil productions and a weak exchange rate that had conspired to keep the fiscal deficit, inflation and interest rates at unproductive levels.

In 2016, growth had slowed to 3.4 per cent and the debt stock had mounted to GH¢122.3 billion, equivalent to 73.1 per cent of Gross Domestic Product (GDP) at the time but 56.8 per cent of GDP now.

The sentiments of investors, consumers and businesses had also suffered hefty drops, resulting in portfolio reversals and low investments that ultimately impacted adversely on the local currency.

At the time, the International Monetary Fund (IMF) was in the final year of a three-year Extended Credit Facility (ECF) programme that aimed to stabilise the economy and put it back on the path of growth.

Turnaround

By 2018, with Mr Ofori-Atta in charge, these indicators had reversed for the good, albeit under an extended IMF mandate and an economy that was shouldering the closure of more than 450 financial institutions and an energy sector debt variously estimated to be more than US$1.5 billion.

Also, his stern stance on spending together with his strategy of replacing short-dated debts with longer dated instruments proved useful. They provided the economy with the needed space to ‘breath’ and to take on social infrastructure spends, including those from the free Senior High School (SHS) programme.

By last year, however, the situation had deteriorated, with COVID-19 pandemic acting as a catalyst.

The economy suffered its first depression in more than three decades, the debt-to-GDP ratio rose to 74 per cent in November, the deficit was estimated to end 2020 at 11.4 per cent and more than 80 per cent of domestic revenue is now used to pay debt service cost.