NPP Manifesto Launch: 5 Claims by Dr. Bawumia Fact-Checked – Only One Entirely True

The New Patriotic Party (NPP) launched its 2016 manifesto in Accra, this Sunday. When our team of fact-checkers subjected five claims made by Dr. Mahamud Bawumia to scrutiny, it was found that only one of them was entirely true. Two claims were found to be true but misleading, whiles one claim was found to be mostly true and half true. Below are the claims he made, the fact-checking verdicts and the bases for the verdicts.

Claim 1: Moody’s did not upgrade Ghana. Ghana’s rating under Moody’s is still B – . It is only the outlook that has been revised. And that is not equivalent to a change in ratings or a ratings upgrade.

Verdict: Entirely True

Explanation: According to an announcement by Moody’s Investor’s Service on 23 September 2016, the Government of Ghana’s sovereign credit rating was affirmed at B3 and its outlook changed from negative to stable. The key fact in this latest credit rating action by Moody’s on Ghana is that it is an affirmation and not an upgrade. Of course, Dr. Bawumia’s decision to use the Fitch and S&P equivalent of Moody’s B3 rating (B-) is probably for political expediency but it is nonetheless still accurate.

The change in outlook, which was what Ghana recorded, does not amount to a change in rating. It may however reflect an opinion regarding the likely rating direction over the medium term (usually about two years) as result of recent credit or economic developments.

Furthermore, Moody’s clearly states in its latest document on rating symbols and definitions that, “An Affirmation is generally issued to communicate Moody’s opinion that a publicly visible credit development does not have a direct impact on an outstanding rating.” Also, a stable outlook, like was recorded by Ghana, indicates “a low likelihood of a rating change over the medium term.”

This clear differences between a credit rating change and a change in outlook is one that is shared by other major credit rating agencies like the Standard and Poor’s and Fitch.

 

Claim 2: The Mo Ibrahim 2016 report on governance shows that on virtually all key indicators such as safety and the rule of law, human rights, economic opportunities, infrastructure, business environment, human development, health and public management. All these indicators, Ghana is worse off today than it was 10 years ago.

Verdict: True but Misleading

Explanation: As can be seen from the table prepared below from the recent Mo Ibrahim Index of African Governance, the scores of the specific indicators Dr. Bawumia stated have indeed deteriorated over a 10-year period (2006-2015). However, Dr. Bawumia’s biased selection of key indicators and sub-indicators resulted in a skewed representation. This is because there were some indicators and sub-indicators where Ghana’s score had improved over the 10-year period.

Table 1: Change in Scores of Specific Indicators from 2006-2015

Indicators/Sub-indicators Change in Score (2006-2015)
Safety and the rule of law -2.6
Human rights -3.1
Sustainable Economic opportunities -4.2
Infrastructure -6.9
Business environment -4.5
Human development -1.6
Health -7.3
Public management -7.7

Source: Mo Ibrahim Index of African Governance

Claim 3: Mr. Chairman, the Kayeyei are also been taxed under Mahama’s government. They are made to pay market tolls.

Verdict: True but misleading.

Explanation: It is true that the local head porters, popularly called “kayayei” are being taxed. City authorities collect market tolls, which is a form of taxation from them. But this practice did not start in the John Mahama’s NDC government. A study by Kwankye, Anarfi, Tagoe & Castaldo (2007) showed that at least as far back as in 2007, when the NPP was in power, the kayayei’s were made to pay market tolls. According to the researchers;

“At market and transport stations, kayayei are supposed to pay a daily toll to the local authorities, which then allows them to operate for the day within that jurisdiction. However, some kayayei do try and evade paying this daily toll, often running away at the sight of authorities. Others are openly confrontational and refuse to pay the toll, leading to physical abuse by authorities.” (Kwankye et al., 2007, p.15)

So while the claim is true, presenting the issue as if it started in and was exclusive to the John Mahama administration is misleading.

 

Claim 4: The IMF in its recent review of the Ghanaian economy has warned that Ghana is on the cusp of financial and economic crisis

Verdict: Half True

Explanation: In the recent IMF 3rd Review of Ghana’s economic programme, the closest remark which supports Dr. Bawumia’s claim to an extent could be found where “risks to the program” were outlined. The full paragraph is as follows:

“Successful implementation of the program requires continued strong policies and reform implementation in the coming months—particularly through the upcoming election period, when financing conditions might get tighter still. In the context of the now much higher public debt level, a replay of the past spending splurges in election years would greatly heighten the risk of a full-blown economic and financial crisis and undermine Ghana’s development progress…It will be very important for the government to sustain fiscal transparency and be ready to tighten policies aggressively as the situation warrants.”

Though there appears to be some basis for Bawumia’s claim, IMF’s “warning” is more complicated than Bawumia let’s on and is premised on several scenarios that may or may not happen.

Claim 5: Since 2011, real GDP growth has declined steadily and drastically from 14% with the onset of oil production to 3.9% in 2015. Projected GDP growth for 2016 is even lower. Basically fellow Ghanaians, the economy notwithstanding the production of oil is on course to record a lower growth rate than in the year 2000, which was 3.7%.

Verdict: Mostly True

Explanation: Ghana’s real GDP growth according to the World Bank was 14.05% in 2011, and that this dropped to 3.88% in 2015. Also, both the World Bank and the IMF project lower GDP growth in 2016 than was recorded in 2015. According to the World Bank, “overall gross domestic product (GDP) growth for 2016 could be below the 3.9% growth in 2015 due to production problems in the oil sector.” The IMF, also on the basis of the disruptions to production in the oil sector, project a weakened GDP growth. According to  IMF’s 3rd Review Report (p. 49) released on October 3, 2016, Ghana’s “GDP growth is expected to slow down to between 3 to 4 percent in 2016”. Also, if one is to go by IMF’s earlier specific GDP growth estimate of 3.33%, then Dr. Bawumia’s claim that the expected growth in 2016 will be lower than the 3.7% recorded in 2000 is true.

However, it must be stated that the Ministry of Finance in its recent Mid-Year Review of the 2016 Budget had more positive expectations of growth for the year. “In 2016, overall GDP is expected to grow by 4.1 percent, while non-oil GDP (excluding oil and gas) is expected to grow by 4.6 percent”, the document stated.

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