General News of 2014-05-19

Comment: Over expenditure & unfunded visions, Ghana’s actual strategy

It was health policy lecturer, Dr. Nii Ayite Coleman, who first outlined the argument in 2008 that your policy is actually what you spend your money on. To this, I add that your plan or strategy is nothing more than what you have secured funding for. Anything else represents in my non expert opinion either wishful thinking, or the path of financial indiscipline, littered with debts and damnation.

Ghana has just completed three days of a National Economic Forum with some serious expert thinking on how to turn around the country’s dire economic fortunes. Of course the main opposition engaged in its usual boycotts. These fortunes have been dire enough to spark discussions of a possible wage freeze and retrenchment of workers. While the shallowness of my economic knowledge is not in doubt, I believe I have learned a few simple lessons along the path of life. These perspectives are derived from the two main positions outlined above by Coleman and myself.

Why do our governments talk about a policy of fiscal discipline when the actual policy is fiscal indiscipline? It is almost an established curse that with each election cycle, governments are going to overspend despite pledges to the contrary. Inevitably, good old politics takes over, thus eroding marginal economic gains in the pre-election years. I recall the public lambasting the Kufour administration for leaving a deficit in the range of 14.5%. It was as if the world had come to an end. After three years of tinkering with the situation, Mills handed over to Mahama, a deficit in the range of 11%. Given that these figures reflect the same level of performance, it has become clear to me that it is virtually the same economic system and fundamentals that are in operation. Nothing has changed; we are doing the same things and recording the same outcomes while pretending to be surprised.

Time without number, I have heard many argue for some sort of a home grown economy; grow what you eat, eat what you grow, set up local manufacturing industries, trade among your selves etc. Meanwhile, the real policy is high flying importation of toothpicks, second hand clothes, rice, canned tomatoes etc. While we pursue this discordance between policy intent and actual policies, the produce from our farms rots by the roadside. In the President’s recent State of the Nation Address, he outlined a noble intent to grow home-grown business giants while promoting made in Ghana goods etc. Beyond exhortations to us to patronize made in Ghana goods, I am yet to hear the specifics of how the President intends to execute the plan as a comprehensive national agenda.

Why do you develop impressive plans without knowing either how much it would cost or the secured source of funding for executing same? Two distinct approaches are worth reflecting on. In the first, I have really come to appreciate organizations whose budgets represent valid translations of the realistic costs of activities they actually intend to embark on. They rarely spend above or below 10% margins of the budget and the discipline in implementing according to the budget is rigorous. Activities are executed because they were planned and budgets secured for them and not because it suited anybody’s whims. Great visions, specific activities, secured funding, rigorous implementation and reflective evaluation seem to be the motto. There is no loud declaration of visionary intent without a defined source of funding. I have observed these features in mainly global or international organizations.

On the other spectrum are those organizations that create what I will call phantom budgets with unrealistic forecasts. Further, there is no attempt to correlate budgets with actual activities to be executed in the achievement of the vision. Budgeting is done because it is a requirement and not because there is intent to adhere to it. These organizations are chronically either underspent or overspent with respect to various budget items. In some bizarre circumstances, activities already budgeted for with secured funding are not executed because resources are not released to officers on the ground. In some instances, visionary declarations are made before sources of funding are identified or actual funding secured. The majority of organizations with this profile in my experience have been local.

Where does Ghana as an organization fall? The government made a manifesto promise to build 1600 health posts over four years. This translated to an average of 400 health posts per year. Needless to say, the government did not build 400 health posts in 2013 and neither is it on the verge of completing 200 health posts by mid- 2014. The reasons for this have largely been financial. So the question is, could government not have identified a clear line of funding for executing these projects prior to making the promise, especially since it was the same party in government? The same goes for the intent to build 200 secondary schools, not one of which has been built after more than one year.

Each year, various Ministries, Departments and Agencies draw up heavenly budgets. Consistently, they receive a tiny fraction of their requests from central government. As Coleman has argued, given your five year trend of expected budget support from government, why not stop deceiving ourselves with gargantuan plans and plan only for the activities that your budget can realistically support? Alternately, why don’t we embark upon a separate path of securing alternate nontraditional funding sources?

GETFund contractors are owed, health insurance claims reimbursements to health facilities is in 5-6 months of arrears, caterers in the school feeding program are crying. At a recent public forum, the budget on emoluments was overspent by almost 300% in one sector of the Ghanaian economy. But still, the government promises more programs with no defined source of funding, the latest of which is free school shoes and free secondary education in 2016 including free for those citizens who can afford to pay. When we asked for source of funding, Mr. President said we should wait for the 2016 budget, and so we will.

In conclusion, we need more than good intentions. If we have to assess, between what you say (policy intent) and what you do (policy action), we will go for the latter. Similarly, our plans ought to be informed by rigorous and disciplined respect for funds clearly secured for the purpose. Without this, our plans simply assume the status of wishes.

By: Sodzi Sodzi-Tettey

www.sodzisodzi.com

Sodzi_tettey@hotmail.com

Source: Sodzi Sodzi-Tettey
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