#BawumiaSpeaks: Here are the false, misleading claims in the Veep’s economy speech

Yesterday, Vice President Dr Mahamudu Bawumia addressed an auditorium packed with top government officials, the media, party leaders and the tertiary students wing (TESCON) of the governing New Patriotic Party (NPP). 

While his presentation was addressing a Training and Orientation Conference organized by the TESCON in Kasoa in the Central Region, the Veep’s speech was a response to what appears to be a nationwide clamour for his voice on the ongoing economic hardship. Dr Bawumia has over the years touted the government’s strong economic fundamentals.

The Vice President’s two-hour speech, therefore, addressed the economy. It focused mainly on the current macroeconomic indicators of the country and what the government has been doing so far.

Fact-Check Ghana followed the presentation and verified some of the claims. Below are the details.

Claim 1: “Despite these tax reductions, the data shows that revenue collection in nominal cedi terms has increased by 25% annually since 2017.”

Verdict: Completely False

Explanation: In the mid-year budget statement of every year, the Ministry of Finance presents the fiscal performance of Ghana in the previous year. The fiscal performance data include total revenue and grants, total costs, and the fiscal balance. The team compiled the total domestic revenue (without grant) of the country from 2016 to 2020 to ascertain whether there has been an annual 25% increment.

Ghana’s Total Domestic Revenue 2017 – 2020

Source: Ministry of Finance

From the Table above, it is clear that revenue being collected over years has been increasing. However, it is not accurate that it has been increasing by 25% annually. In fact, since 2017, there has never been a 25% increment in year-on-year growth in domestic revenue.

Claim 2: “In fact, the average rate of growth of GDP from 2017 to 2021. This is the period including COVID when we had 0.4 percent growth in GDP. The average rate of growth of GDP between 2017 to 2021 is 5.3 percent. But this compares with an average rate of growth between 2013 to 2016, when you had no COVID, when you had no Ukraine war, of 3 percent.”

Verdict: False

Explanation: Dr Bawumia’s claim of the GDP growing at an average of 5.3 percent from 2017 to 2021 is accurate. However, the Veep appears to have reduced the average growth rate from 2013 to 2016 by 0.92%.

Below is a World Bank Data on Ghana’s GDP growth from 2013 to 2020. The team sourced the 2021 data from the Ghana Statistical Service (GSS)

Ghana’s GDP growth rate from 2013 – 2021

Source: World Bank & GSS       *Average GDP growth by Quarter 3 of 2021

While the 0.92% could be said to be small, it is however a significant growth rate that cannot be disregarded, given that Ghana recorded a lower growth rate, 0.4%, in the whole of 2020.

Claim 3: “The robust growth in GDP has led to a decline in total unemployment. Based on World Bank data, the average unemployment data between 2014 and 2016, stood at 6.29 percent but has declined to an average of 4.37 percent between 2017 and 2020.

Verdict: True, but misleading

Explanation: When cross-checked from the World Bank data, the unemployment rate presented by Dr Bawumia is accurate. However, the Veep appears to be engaging in a cherry-picking exercise, resorting to data that makes the government look good.

According to the 2021 Population and Housing Census, unemployment rate in Ghana is currently 13.44%. The figure is the highest in recent years, having gone up by 6% since 2010. The data was reported in parliament last month, March, by the Employment Minister, Baffour Awuah.

The World Bank data that Dr Bawumia referenced is modeled after the International Labour Organisation’s (ILO) estimates. The 13.44% unemployment rate was compiled by the Ghana Statistical Service, the national statistical office of Ghana, charged to be producing such important pieces of data.

Also, if the Vice President is presenting the state of Ghana’s economy in April 2022, it is misleading to ignore current unemployment figures and focus on what was reported in 2020.

Claim 4: “Reduced electricity tariffs cumulatively by 10.9% compared to a cumulative increase of 264% under the previous government”

Verdict: Completely False

Explanation: This is a claim that the Vice President has made before which Fact-Check Ghana debunked.

According to data from the Public Utility Regulatory Commission (PURC) and media reports, during the tenure of the John Mahama government (2013-2016), electricity tariffs were increased at different rates and at different times.

In 2013, the PURC announced a 78.9% increment in electricity tariffs which was to take effect on October 1, 2013. This resulted in a nationwide demonstration and agitations by the Trade Union Congress (TUC) leading to a reduction of the increment to 58.19% in November 2013.

In 2014, the tariffs were increased at an average rate of 28.35%. Specifically, the tariffs were increased by 9.73%, 12.09% and 6.53% in the first, second and fourth quarters respectively.

In 2015, the PURC further increased the tariffs by 59.2%. Even though there were reports in May 2016 suggesting that there had been an increment in tariffs in the first quarter of 2016, the PURC had, in a press release, indicated that there had not been an adjustment of tariffs in the first quarter of 2016. Below is the breakdown of the increment from 2013-2015.

Source: PURC, Media Reports

Thus, during John Mahama’s tenure, electricity tariffs increment was cumulatively 145.74%. Indeed, an analysis of electricity tariff increment under the Mahama regime by the vice president in 2019 arrived at a cumulative increment of 166%. It is therefore not true that there was a cumulative increase of electricity tariffs by 264% in the erstwhile NDC government.

But has the NPP government indeed reduced tariffs by a cumulative 10.9%?

 According to the PURC, in the last ten years (2010-2020), there has only been a reduction in electricity tariffs twice. The first happened in March 2011. And the next was in March 2018, which was under the current government. Under this same government, there have been increments in electricity tariffs twice- in July and October 2019. Below is a screengrab of a table indicating the times the PURC revised electricity tariffs in the last ten years.

 Source: PURC, 2020

Source: PURC

In March 2018, the government reduced electricity tariffs for households by 17.5%. About a year later, in July 2019, the government increased the tariffs by 11.7%. This was followed by another increment of 5.94% in October of the same year. Comparing the cumulative increase in electricity tariffs and its decrease, the government has rather increased electricity tariffs by 0.14%.

 Claim 5: “I should note that Ghana is the first country in Africa and one of the few in the world to achieve this type of interoperability between bank accounts and mobile wallets.”

Verdict: Completely False

Explanation: This is a claim that the Vice President has made before which Fact-Check Ghana debunked.

The Mobile Money Payment Interoperability is the service that allows direct and seamless transfer of funds from one mobile money wallet to another mobile money wallet across networks. It was developed by Ghana Interbank Payment and Settlement Systems (GhIPSS) with the active collaboration of the telecom industry.

The first phase of the mobile money interoperability system was launched on May 10, 2018 by the Ghana Chamber of Telecommunications, together with the Government of Ghana, the central bank, GhIPSS and commercial banks.

Six months later, on Wednesday, November 28, 2018, the second phase of the project was launched.

However, before Ghana had contemplated this move, Tanzania was already benefiting from the usage of the mobile money interoperability system. The country was the first to launch the system in 2014 followed by Kenya in 2016 and Madagascar in 2017.

Tanzania effectively launched Account to Account interoperability to facilitate payments by mobile networks in September 2014. It followed a two-year engagement among mobile money operators.

Tanzania’s adoption of mobile money interoperability is confirmed in a GSMA report titled “Tracking the Journey Towards Mobile Money Interoperability”.

Fact-Check Ghana also spoke with some Tanzanian citizens to confirm if, indeed, the type of interoperability between bank accounts and mobile wallets works in the country.

“Yes, it’s very convenient to send money from one’s mobile account to a different mobile account or bank,” Hussein Bin, a photographer and youth activist in Tanzania, said. He added that the “charges for the services differ depending on the bank”.

Asked if the type of interoperability works in Tanzania, Lilian Alex, a programme assistant with the East African Civil Society Organisations Forum (EACSOF), based in Arusha, said “Yes, it does.” She confirmed that she has ever used it.

It is, therefore, not true that Ghana is the first country in Africa to achieve this type of interoperability between bank accounts and mobile wallets.