Presidential Debate: 8 Claims Fact-checked – 4 Mostly False

Three presidential candidates for the 2016 elections on November 22, 2016 took part in a debate organised by the Institute of Economic Affairs (IEA). The candidates in their submissions made claims about the economy and the energy sector, eight of which were fact-checked. Out of these eight claims, four were found to be mostly false. The claims the presidential candidates individually made and the fact-checked results are presented below.

Dr Papa Kwesi Nduom – Progressive People’s Party:

Claim 1: We are in near HIPC situation.

Verdict: Mostly False

Explanation: When the IMF and the World Bank introduced the Heavily-Indebted Poor Countries (HIPC) initiative in the 1990s, Ghana was assessed to be a HIPC with unsustainable debt. Ghana’s public debt then as measured by the debt-to-GDP ratio was 125.4%. This high debt level dropped to a record low of 26.2% in 2006 thanks to debt reliefs enjoyed under the HIPC programme.

Since that time, the government has taken on a lot of debt to finance projects. This has again led to high public debt levels that have been criticised as being unsustainable and if not curtailed, could lead to pre-HIPC conditions. The problem with Dr. Nduom’s claim is that Ghana’s public debt as at September, 2016 stood at US $ 28.3 billion (GHS 112.4 billion) or 67.4% of GDP. This current debt-to-GDP ratio though undoubtedly high is less than what was recorded in 2015 and definitely nowhere near the 125% recorded in the pre-HIPC year of 2000.

Also, evidence from the IMF counters Dr. Nduom’s claim. According to IMF’s October 2016 report on the third review of Ghana’s extended credit facility arrangement, Ghana’s debt levels are on a favourable trend. It states that, “Ghana’s debt sustainability remains fragile but significant fiscal consolidation is starting to bear fruits…end-2015 debt-to-GDP ratio turned out to be smaller than envisaged in the previous DSA due to larger fiscal consolidation, higher nominal GDP, and exchange rate stabilization.” The IMF review further states that, “With continued fiscal efforts, prudent debt management, and careful selection of projects to be financed by non-concessional loans, the debt trajectory is now projected to show a more favourable path than before.”

 

Claim 2: Manufacturing growth has been declining

Verdict: Mostly True

Explanation: Nduom’s claim is mostly backed by historical data in the Revised 2015 Annual Gross Domestic Product released in September 2016 by the Ghana Statistical Service. Manufacturing growth in 2010 was 7.6%. It jumped to 17.0% in 2011. Growth in this sub-sector then dropped to 2.0% in 2012, -0.5% in 2013, and -0.8% in 2014. However, manufacturing growth picked up to register a 2.2% growth in 2015.

 

Claim 3:  In 2012 it was the same Pres. Mahama who said if you elect me dumsor will be a thing of the past. 

Verdict: Entirely True

Explanation: On September 4 2012, in a Policy Action Statement President Mahama said “I have directed an Inter-ministerial committee chaired by the minister with immediate effect….to ensure that your power supply are not unduly disrupted…We have galvanized every effort to increase our generating capacity, in order that the minimum demand by our industries is met. By the end of October, we will have an additional 300 megawatts of electricity production that will come online for distribution, and this should greatly reduce the inconvenience of load-shedding.”-

At the time the president made this statement, Dumsor was only a few hours per every 72 hours.

As the 2012 elections drew even closer, President Mahama stated at the then NDC 2012 Manifesto launch on October 4 2012 that, “Ghana has a comparative advantage when it comes to production of energy. In the second NDC administration the issue of load shedding will be a thing of the past. It will never happen again. I say this because we have established the foundation to be able to achieve this promise “our vision is to hit 5000 megawatts of power production a day in Ghana by 2015. Currently, Ghana produces a little over 2000 megawatts.”

 

Dr Edward Mahama – People’s National Convention:

Claim 4: There are six turbines only two are working. Akosombo is not able to generate power from all six turbines. It does only two because they don’t have money to fix the problematic turbines and low water supply.

Verdict:  Mostly False

Explanation:  Our checks with the Volta River Authority indicates that all 6 out of 6 turbines are available and can be used anytime and that it’s not accurate that only two are operational now because of some problem with the turbines or low water levels. As of yesterday (November 22, 2016) the water level was 252.43 feet (76.941 meters) far above the 240 feet minimum level for the operation of the dam.

 

Jacob Osei Yeboah – Independent Candidate:

Claim 5: Nobody knows how the tariffs are computed. We cannot remain at the level where we have ECG making losses of over 40 percent.

Verdict: Mostly False

Explanation: It is not true that nobody knows how the tariffs are computed. The Public Utilities Regulatory Commission (PURC) publishes tariff formulae and rates in accordance with section 19 of the PURC Act (538). The last time this was published was December 7, 2015. Again the Electricity Company of Ghana (ECG) also publishes the tariff reckoner and the last time this was published was July 1, 2016.

Also, it is not true that the losses are 40%. System and commercial losses by the ECG was 22.8% in 2013. 24% in 2014 and it is currently 25%. Even though the ECG has not been able to attain its 15% target, it’s nowhere near the claimed 40%.

 

Claim 6: Debt exacerbated by single spine.

Verdict: Mostly True

Explanation: The Single Spine Salary Structure (SSSS) and the issues surrounding it were cited as an added burden on government’s debt structure in the 2016 Mid-Year Budget Review document. It specifically states that, “It (SSSS) also constituted one major source of budget overruns and imbalance”.

Furthermore, several government officials have at several times bemoaned the burden the implementation of the SSSS has placed on the government purse.

 

Claim 7: Government is borrowing at the rate of 22 percent.

Verdict: Mostly True

Explanation: Mr. Yeboah’s estimate of the rate at which the government of Ghana borrows locally is mostly true when one looks at the recent rates of treasury securities (bills, notes and bonds). The rates of treasury securities denotes the rate at which the government is borrowing locally. As at the time of checking this claim, the treasury rates were with the exception of the 91-Day bill were about 22% and are as follows:

 

Period     Discount Rates Interest Rates
91 – Day 19.4358% 20.4284%
182 – Day 20.2257% 22.5012%
1 – Year Note -% 22.2500%

Source: Bank of Ghana

 

Claim 8: 52 percent of Ghanaians are into agriculture.

Verdict: Mostly False

Explanation: Mr. Yeboah’s estimate of Ghanaians engaged in agricultural activities is exaggerated. According to information from the Ghana Living Standards Survey (GLSS6), a nationwide household survey undertaken in 2013, only 44.7 percent of all employed persons 15 years and older are engaged in the agriculture, forestry and fishing industries. This figure is also corroborated by the World Bank data on agricultural employment in Ghana.

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