Business News of 2014-04-07

Ghana’s Troubled Economy and Seth Terkper

-Can he survive?

Finance Minister Emmanuel Seth Terkper is in torrid times managing the national kitty at this time as there seems no indication of him untangling himself from the economic difficulties any time soon.

Terkper, an accountant with bias in taxation and fiscal policies stepped in the shoes of his former boss, Dr Kwabena Duffuor at a time the economy was in topsy-turvy shape, having a year earlier posted an unprecedented GDP growth of 14%; but ended the year 2013 with overall budget deficit estimated at 10.8 per cent of Gross Domestic Products (GDP).

Since his assumption of office, and with the huge budget deficit and arrears from the preceding years, the country’s macro-economic fundamentals continue to deteriorate leading to the fast depreciation of the local currency, the Cedi.

This among other issues has brought untold hardship to the citizenry and there are no apparent signs that the economy will find its right footing soon as many would have wished.

This has resulted in President John Dramani Mahama reeling under intense pressure from members of his ruling National Democratic Congress to oust Mr Terkper in whom he has utmost confidence to bring about the kind of economic respite that would lessen hardship and reduce poverty in the country.

The president’s insistence on Terkper remaining at the Finance Ministry among other factors, The aL-hAJJ’s investigations has revealed is contributing to the simmering ‘cold-war’ between President Mahama and his party stalwarts, and rank and file.

Whereas the party and indeed, Mr Terkper’s colleague Ministers and party gurus think his style of managing the economy is not positively impacting on the political fortunes of the ruling NDC, the President believes his Finance Minister is on the right track of building a sustainable economy.

President Mahama’s public endorsement of Terkper with an indication that, no one would stampede him into ousting his ‘trusted and hardworking’ Finance Minister is said to have further ruffle feathers and consternation within the governing party.

May be Mr Terkper is right, and may be lucky enjoying the full support of a sitting President in spite of the inexorable onslaught marshaled against him from a sizeable number of persons from both government and party, but to what extent can the Finance Minister ignore these concerns, cling to his economic measures and continue to have the President behind him whiles he remain at post?

Indeed, the call for Terkper’s removal has moved from what was thought to be orchestrations by some few NDC kingpins to a more elaborate version with members of the opposition parties and a large section of Ghanaians joining the fray.

To exacerbate Terkper’s already worrying situation, The Trades Union Congress of Ghana (TUC) has asked him to stop the praise-singing and “get to serious business of managing the economy.”

According to the TUC, the urgent policy statement on the economy delivered by the Mr Terkper to Parliament on Tuesday, April 1, 2014, was a clear indication that he “does not fully understand the laws, rules and norms governing industrial relations practice in Ghana.

Surely, the ‘battle’ is now President John Mahama, the Finance Minister versus NDC bigwigs with support from members of the opposition and undeniably, the rest of Ghanaians.

The irony however is that, the prerogative to hire or fire a minister rests with the President and that is where Terkper seems safe, but for how long can the President withstand the pressures from his party and Ghanaians at large?

The disgruntled voices calling for Terkper’s sack is increasingly becoming many by the day, especially as he himself admitted that; results from the measures so far put in place to address the difficulties in the economy would take some time to manifest.

Economic experts wonder how the Finance minister will get the needed cooperation from his colleague ministers when they have also joined the league of persons murmuring and whispering, with the excuse that his handling of the economy is making their work very difficult.

In a recent radio discussion, Information and Media Relations Minister, Mahama Ayariga reflecting the mood of his colleague ministers summed it up when he was compelled to publicly complain that Terkper’s policy of honesty was giving government communicators more headaches over how to defend government on the economy.

“I have consistently had problems with the finance minister on this issue. I must say it on this platform because he has insisted, if you want Ghanaians to help you solve problems, you would have to state it. “People are now using those statements purely for propaganda purposes and they are not helping in managing the situation”, he observed. You have to manage your statement because if you don’t manage your statement very well, it may be the one that will trigger a certain behavior and that is the problem I have now,” aggrieved Ayariga lamented.

NDC stalwarts in chats with The aL-hAJJ have maintained that managing an economy of a third world country like Ghana where everything is politicized conflicts with Terkper’s insistence on classical economic solutions in tackling the country’s economic difficulties which they say is causing the political fortunes of the NDC.

They say the Finance Minister’s management of the economy is creating trepidations among supporters of the NDC to the extent that they are unable to publicly associate themselves with a party they were more than willing to defend publicly 12 months ago.

Many NDC faithful have raised concerns that in a politically charged environment like Ghana and having in mind that the NDC prides itself as a social democratic grouping, Terkper’s policy of the total removal of subsidies, introduction of new levies and taxes and other draconian measures is antithesis of what the governing party stands for.

Aggrieved party gurus believe Terkper is giving free ammunition to members of the opposition New Patriotic Party to nail the NDC ahead of the 2016 elections.

To add to the difficulties the Finance Minister is said to be giving the ruling party was his recent sharp public disavowal of President Mahma’s resolve that the country will continue to borrow to meet the nation’s infrastructural deficit.

Addressing parliament on the state of the economy, Seth Terkper dismissed the President’s statement and virtually concurred with the opposition NPP’s 2012 vice presidential candidate, Dr Mahamudu Bawumia that government should as a matter of urgency cut down on borrowing.

Mr. Terkper again was to puncture his own government’s persistent position on public sector wage bill being largely responsible for the country’s present economic predicament. He told parliament last week that compensation for government workers was 56% of government revenue instead of the between 69% quoted by the President and Fifii Kwetey’s figure of 90%.

The Finance minister’s statement comes in the wake of a recent denial by CLOGSAG that the SSSS cannot be blame for shocks in the economy.

In the midst of these serious opposing views from government officials, many have said it is just a matter of time and course for Ghanaians to see if the bubble within the ruling will remain intact?

Source: Al Hajj
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