Ghana: Opposition wins as economy falters

by Kwabena Opong

At exactly 7:15 pm Ghana time on Friday, December 09, 2016, Ghana’s President John Dramani Mahama of the National Democratic Congress (NDC) called Nana Addo Dankwa Akufo Addo, flag bearer of the opposition New Patriotic Party (NPP) to concede his defeat in the general elections held Wednesday, December 7.  Nana Addo’s running mate is Dr. Mahamudu Bawumia, an economist and former deputy governor of the Bank of Ghana. The duo won 53.85 percent as against John Mahama’s 44.40 percent.

For the first time in the electoral history of Ghana, collation of ballot results in this year’s election was delayed for reasons of ensuring fairness and accuracy, according to the nation’s chairperson of the electoral commission, Mrs. Charlotte Osei.

Nana Addo Dankwa Akufo Addo assumes the highest office of the land after two failed attempts.  His first attempt in 2008 ended in his defeat by late President John Evans Atta Mills. After a contentious election in 2012, Nana Addo, his running mate and the NPP petitioned the Supreme Court to contest the results. A controversial verdict cleared NDC’s John Mahama and his party.

Nana Addo Dankwa Akufo Addo in his acceptance speech promised Ghanaians, irrespective of their political, religious or ethnic background, that he would be president for all.

The NPP comes into office at a time when the country’s economy is in near recess. The NDC administration’s fixation on infrastructural development, in most cases unplanned and spontaneous, was mostly financed with foreign loans. According to Vice President-elect Mahamudu Bawumia, the NDC administration of John Dramani Mahama has been presiding over an economy characterized by fiscal and monetary indiscipline and financial instability. 60 percent of the nation’s almost US$40 billion debt was acquired in the last three years of the administration’s tenure. This is in addition to GHC 280 billion (US$70 billion) collected as taxes as well as money accrued from crude oil amounting to about US$5 billion. Money spent on the so-called infrastructural project is only US$7.5 billion.

Most of the money borrowed or generated internally is applied to interest payments on the several loans. “The West African country, which produces oil, gold and cocoa, has endured a currency crisis, electricity shortages, and took a $918 million bailout from the International Monetary Fund last year in the face of mounting debt” the New York Times observes. The cash cow of the nation, cocoa was neglected as galamsey or illegal mining destroyed most farms while the mass spraying exercise that helped increase production in the Kufuor administration was limited to farmers belonging to the ruling NDC.

The IMF bailout may not have achieved much other than to make life harder for the ordinary Ghanaian. A freeze on jobs, removal of subsidies on fuel and other petroleum products among other harsh measures are the only benefits accruing from the IMF. The resort to Eurobond even at exorbitant cost has become a constant feature of the country’s economic management. The NDC’s legendary spending habits in election year was elevated this year. Fiduciary methods to increase money supply in the system were adopted to feed the government’s appetite for power. Consequently the Ghana Cedi has plummeted to around GHC4.30 to the US dollar. Notwithstanding the devaluation of the cedi traders import and other levies, duties, and taxes on commodities especially for the Christmas period have been increased.

Mismanagement in the energy sector has resulted in incessant and regular power outages leading to  increased unemployment following the emigration of some businesses and industry to neighboring countries in the region. Increased taxation and prices of fuel have affected transportation costs and higher commodity prices, as well as high utility bills. Instead of fueling and maintaining the existing generation capacity more thermal generators have been added at a huge cost. The Bui dam is now operating full time but was built to fill gaps in supply only.

Social intervention programs like the National Health Insurance Scheme (NHIS), free maternal care, school feeding, youth employment programs among several others have either been scuttled or mismanaged. So many programs, including the Savannah Development Agency (SADA), GYEEDA, SUBAH became conduits for embezzlement.  The soaring number of the unemployed now includes doctors and nurses graduating from the nations medical institutions, even as new hospitals are being built across the nation while existing ones are rendered under-equipped.

Election 2016 was a referendum on the morals of the NDC administration. On the lips of almost every Ghanaian, including members of the government party, was the tidal wave of corruption that became the hallmark of Mahama’s government. Nepotism, cronyism and appeal to ethnicity for jobs and appointments generated scandals upon scandals in a government seeking another term. Financing for the school feeding program, for instance, initiated by the government of the Netherlands was pulled out after the donor discovered that the administration of the program was flawed with corruption. The government of the United Kingdom also suspended its financing of the free maternity care program.

The Mills-Mahama administration created a milking cow in judgment debts. The administration in 2010 made provision for judgment debts in its budget for the year. The more than US$600 million judgment debt paid to individuals and businesses some of who did not have any contracts were aptly described by a Supreme Court judge as a create-loot-and-share exercise. Revelations coming from investigations into GHC 52 million paid to Alfred Agbesi Woyome show that the NDC financier spread the money around his party cronies. He admitted not having any contract but continues to claim that he deserved it. He is yet to make any payments as ordered by the Supreme Court. The nation is waiting to hear from him in a cross examination by former NDC Attorney General Martin Amidu in December.

The government lacked the ethnic balance to operate fairly as most cabinet and top positions were allotted to persons from particular ethnic groups. Critics became targets of government propagandists on radio and television. The president, in an affront to the Judiciary released from prison the party’s propagandists who were committed to jail for contempt of the Supreme Court.

A Nana Addo-Bawumia government assumes office guided by a manifesto premised on the provision of jobs. To do this the party intends to adopt fiscal and monetary discipline as well financial stability. The NPP’s promises to provide a factory in every district, as well as US$1 million dollars for every constituency per year have been criticized by opponents and some political commentators as too ambitious. Vice president elect Alhaji Bawumia has, however, reassured Ghanaians that his administration would be able to execute its programs considering the availability of the resources in the country. The previous NPP administration, was able to finance most of its programs from internally generated funds and that is the tack likely to be adopted in infrastructural development.

Considering the staggering tax revenue of GHS280 billion (US$70 billion) prudent management of the country’s economy should be able to return things to normal in a much shorter time than it is anticipated.

In this transition period, the incoming administration must be mulling over the quality of its team, a much needed component for success for a country in a hurry. Much of the failures of the Mills-Mahama administration could be attributed to lack of expertise and experience. The NPP on the other hand does not lack such expertise and considering its successes in its first administration, same could be replicated this time around.  Vice President-elect Alhaji Dr. Mahamudu Bawumia is an experienced economist who has shown his mettle as consultant to the World Bank and the International Monetary Fund. He was also on the team that brought sanity into the nation’s economy during the first NPP administration under President John A. Kufuor.

Ghanaians are expecting a reduction in fuel, utility tariffs, school fees, taxes and levies put on almost every service rendered by public institutions. They are impatient as cost of living continues to escalate without reason. Nana Addo has to take immediate steps to assuage the people’s anxiety even before the honeymoon begins.

Posted by on Dec 15 2016. Filed under top stories. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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