General News of 2013-12-21

Economist tells Mahama: Remove old guards from gov't

President John Dramani Mahama has been asked by the Economist Intelligence Unit December report, to get a grip of the nation and its economy, tackle the shortcomings of his government and demonstrate some level of leadership skill or “Ghana’s admirable yet fragile democracy may be undermined.”

The international publication has also advised President Mahama to pursue vigorously his crusade of getting rid of what it describes as the “party populists and crony capitalist” appointees in his administration who have remained ever present from the PNDC government headed by Jerry John Rawlings.

This admonition is contained in the December edition of the Economist magazine which is due to be released on Saturday, December 22.

The publication notes that despite Ghana still being regarded as “West Africa’s biggest economic and political success”, several recent figures are sobering and requires the urgent attention of the President and his administration.

According to the Economist, inflation is soaring above 13%, budget deficit growing from 4% to nearly 12% of GDP due to a splurge in spending by the Mahama government in the run-up to the presidential and general elections of December 2012, steep rises in the price of electricity and water, both in erratic supply, plus increases in food costs; have all contributed to the rapid shrinking of the real value of wages.

“The local currency, the cedi, has continued to slide, halving in value against the dollar since 2008. The price of gold, Ghana’s most valuable export, has been dropping. Cocoa has missed its production target,” the publication adds.

The publication explains further that “Though oil is beginning to flow in greater quantities from newly exploited offshore fields and the economy is predicted to grow this year by 7%, following 8% in 2012 and a record-breaking 14% in 2011, Ghanaians are feeling the pinch. A good third of them still live on less than $2 a day. The urban minimum daily wage is a meagre $2.25.”

The publication, however, warns that “Mr Mahama may have to squeeze people even harder, in the short run, if he is to keep the economy afloat.”

In order to keep the “economy afloat”, the Economist says President Mahama needs to move faster than he, and especially some of the party populists and crony capitalists around him, would like.

Proffering solutions to aid President Mahama, the publication notes that improving tax collection and widening the tax base are both vital.

“As a start, a biometric national identification programme is under way. Most people in Accra, the sprawling capital on the coast that is a magnet drawing in perhaps 4m of the country’s 25m people, live in dwellings without proper addresses—with no street names, let alone numbers. Despite Ghana’s bouncy growth, vast ranks of the young have no jobs,” it stresses.

On Ghana’s position of being a beacon of democracy in West Africa, the Economist explains that the peaceful ejection of ruling parties, in 2000 and again in 2008, set an admirable trend.

The Economist was full of praise for the 2012 Presidential Candidate of the New Patriotic party, Nana Akufo-Addo, for “the prompt acceptance of the Supreme Court’s verdict on the election in August,” describing the action as “Statesmanly.”

However, the Economist added that electoral and constitutional reforms were sorely needed to keep Ghana’s vibrant but messy politics in trim.

“A lack of limits to campaign finance has encouraged excessive patronage. A freedom of information bill, long-promised but delayed, must enable the ownership of companies and media outfits, among other things, to be aired,” it added.

It continued, “The constitution of 1992, devised under the eye of Mr Rawlings, who in that year duly won the first multiparty elections since 1979, gives too much power to the president and does too little to separate the executive and the courts. And, once in power, the winning candidate and his party have little incentive to change the winner-takes-all system, whereby the civil service is invariably packed with friends.”