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Accra, July 12, CDA Consult – Mr Kenneth Thompson, Chief Executive Officer of Dalex Finance Company has challenged the government to deal decisively with the threat of army worm invasion due to its destructive nature.

The army worm has been found in the Eastern, Brong Ahafo, Ashanti and Western Regions and other parts of the country and since 2016, it has destroyed more than 5,870 hectares of maize, cowpea and cocoa.

He said in 2016, army worm invaded maize crops in Zambia . By 3 January 2017 about 90,000 hectares were affected, according to reports released by the Zambian government's Disaster Management and Mitigation Unit.

Mr Ken Thompson told the CDA Consult in a mid-year review of the economy and urged the government to marshal all resources to fight against the invading worm “it is an economic and security threat to the nation”.

The Dalex CEO also revealed that Ghana spends over 70 per cent of our income on two items - emoluments and interest payment.

Ghana spent approximately 71.4 per cent of domestic revenue in 2015 on emoluments and interest payment which jumped to 78.2 per cent in 2016, Mr Ken Thompson stated.

He said: “We are on the same trajectory half-year down 2017 nothing has changed...Government domestic revenue is estimated at GH₵45.0 billion an increase of 33.5 per cent over the 2016 figures.

“Non-Oil revenue and grants projected at GH₵42.6 billion in the 2017 budget, is an increase of 29.2 per cent over 2016 and oil revenue also estimated at GH₵2.4 billion an incredible increase of 231.2 per cent over the 2016 figures”.

He said the 2017 budget shows that, Ghana’s domestic revenue hit GH₵30.2 billion in 2015 and rose marginally to GH₵36.4 billion in 2016; 40.7 per cent of domestic revenue was used as compensation of employees in 2015 and 46.2 per cent was spent on employees compensation in 2016.

He said the government spent 30.7 per cent of domestic revenue in 2015 on interest payments, which jumped to 32.0 per cent in 2016.

Mr Ken Thompson described the size of government, government borrowing, low government revenue, the exchange rate, the army worm, the financial sector debt and disposable income as bad news for the country.

The Dalex CEO also revealed that Ghana’s economy is still fragile and bedevilled with huge challenges and could crumble under any major economic shock such as crop failure or a sharp fall in commodity prices.

He reiterated that the local currency is overvalued and the government spends huge resources to supplement the cedi, “if devaluation is managed, the amount saved can be used to support other key sectors of the economy.

“An overvalued currency only supports a select few who holiday abroad, consume foreign goods and pay dollar denominated school fees. My grandmother in the village does not care!

Using the Big Mac Index, he pegged the local currency at GH₵11.86 to $1.00. This means that in economic terms, the local currency is 270 per cent over valued.

Mr Ken Thompson noted that incomes have been stagnant and their value eroded by the depreciation of the local currency, inflation and the high cost of utilities.

He also expressed concern about the non-payment of contractors by government “as a significant player in the economy the non-payment of government debts as well as freeze on award of new contracts is of major concern. Behind every cedi that’s not paid are real lives”.

He acknowledged that interest rates have dropped from 32 per cent to 23 per cent. And that is good for the economy if sustained, because it will promote investment.

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