The Minority New Patriotic Party (NPP) has delivered what it calls the “True State of the Nation” address, challenging the accuracy of President John Dramani Mahama’s recent presentation to Parliament.
According to the Minority caucus, the President’s address did not reflect the true state of affairs in the country.
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Below is the full speech delivered by former Finance Minister Dr. Mohammed Amin Adam.
THE TRUE STATE OF THE NATION ADDRESS BY THE NPP MINORITY CAUCUS IN PARLIAMENT AT PARLIAMENT HOUSE – 3RD MARCH 2025
President Mahama again cited the headline inflation of 23.8% and the 19% rate of depreciation of the cedi for 2024, as indicators of a badly managed economy. It is important to provide context to this. Following the COVID-19 and supply shocks globally, prices of food and other essentials increased substantially. Even in the advanced countries, inflation averaged 7%, very high for countries that are used to 1% or less inflation.
The causes of this rise in inflation globally were not far-fetched. For example, COVID-19 slowed down the world economy due to lockdowns and the closure of factories and offices including major port facilities across the World; and this adversely impacted global supply chains. Also, many countries implemented fiscal stimulus to revive economic activity. However, faced with supply constraints, the increased demand resulting from the fiscal stimulus led to higher inflation.
To control inflation, the Central Banks of many countries led by the advanced economies resorted to monetary tightening by increasing rates. This led to significant investment reversals from small open economies like Ghana, weakening our currency, and fueling the rise in inflation. This together with imported inflation pushed Ghana’s inflation sharply to 54% by the end of 2022.
The current rate of 23% therefore means that inflation was halved within a year; and we were working to bring it further down to the pre-COVID level of 8(+\-2%) by 2026. Whilst 23% is still high, the effort to bring it down from 54% has been significant.
It must be noted that before COVID-19 struck the World, the NPP demonstrated a record in inflation management. We brought inflation down from 15.4% in 2016 to 11.8% in 2017; 9.4% in 2018, 7.9% in 2019. Inflation for two successive years remained a single digit, the longest period in our recent economic history. The effect of the pandemic began to be felt from 2020 when inflation rose to 10.4% in 2020, 12.6% in 2021, and then to 54% at the peak of the global economic crisis in 2022.
Even laymen can understand this. How the current managers of the economy cannot understand this can only be borne out of political dishonesty. The adverse circumstances the NPP administration faced were unprecedented and such did not exist when President Mahama’s government achieved headline inflation of 15.4% above the target of 10.1% in 2016.
We know that there is an inverse relationship between inflation and the strength of a currency. A higher depreciation of the currency will automatically pass through to inflation in developing economies like Ghana. This means that inflation will also be higher, and the reverse also holds. Therefore, following the sharp depreciation of the cedi in 2022 by 50%, inflation was also going to rise sharply. This strong pass-through would naturally be a major challenge for the managers of the economy. By reducing the rate of depreciation to 19% in 2024, we have seen the muting of the passthrough to inflation and these efforts cannot be glossed over.
These efforts by the previous administration and the favourable results produced should be appreciated by President Mahama and improved for even better outcomes for our people. These effective efforts should not be disregarded and belittled for political reasons. As a country, we gain nothing by this kind of politics.
It is important to note that the rate of 6.5% depreciation we have witnessed year to date in 2025 is not informed by any sustainable strategies by the current government. The current disparity between inflation and the rate of depreciation is evidence of heavy Central Bank intervention on the market.
The Mahama administration and the Central Bank can do that; but this is happening only because the previous administration left a gross international reserve of $8.9 billion by the end of 2024, which is being used to shore up the value of the Cedi. The President deliberately avoided this in his statement.
Fellow Ghanaians, the true state of the Nation is that exchange rate stability which we saw before the end of 2024, and which has continued into the first quarter is not by any magic from the Mahama government. It is because the Akufo-Addo government left significant levels of international reserves.
