Business News of 2014-07-06

Prognosis of Economic crisis by fearless Journalist

Raymond Archer’s Epistle

Prez Terkper… Finance Minister JM

Fearless investigative journalist, Mr. Raymond Archer, has last week finally come out of his closet, slammed finance minister Seth Terkper and schooled President Mahama on the art of governance and the path to tread and get Ghana out of the current economic quagmire.

Raymond Archer, who is the publisher and Chief Executive Officer (CEO) of the national tabloid, The Enquirer, described the embattled Seth Terkper as the current President of Ghana and President Mahama, the finance minister, a bizarre exchange of roles that is largely to blame for the country’s worsening economic situation.

“The last few times I listened to President John Dramani Mahama, I mistook him for the Minister of Finance and Economic Planning. The figures and statistics he poured out were so brilliant. On the surface, it demonstrated that the President appeared to be very concerned about the state of the economy and knows exactly what to do.”

“On the 6th of May 2014, the President’s itinerary included the following: Visit to flood areas, the jetting off to Peduase Lodge to meet with CEOs of SOEs. After that, he had a meeting with Compact II delegation, after which he reclined into another marathon meeting on the economy.”

“This appeared to be a president who seems to care about the economic situation and is doing everything he can to make it better. But behind the pristine brilliance of the President’s mastery of statistics and economic jargons and pouring out the nation’s profit and loss account lies what is actually wrong with the Presidency.

“When I listen to Mr. Seth Terkper, I mistake him for the President of the Republic of Ghana. He speaks very little and it is until TUC threatened government or opposition elements in GUTA locked shops before one heared about what government was going to do or is doing about the economy. In fact Terkper hardly speaks on the economy, not even when he was introducing 17.5 per cent VAT on the banks (now finally botched by a presidential fiat because of its apparent implications on businesses and the ordinary people). It is rather the young, hardworking deputy minister, Cassiel Ato Forson, who tends to speak more to the issues of the economy,” he explained.

The investigative journalist who has in the past worked tirelessly against widespread corruption and human rights abuses in the country went quiet and was said to have taken a temporary retirement from active journalism. However, he bounced back with an informed article in the Wednesday 25th June 2014 edition of The Enquirer newspaper diagnosing the intractable ailment afflicting the nation’s economy and proffering intelligent but very simple solution.

In the said article, The Enquirer CEO who was instrumental in the late President Mills and the NDC winning power in 2008, but who seemed dissatisfied with the Mahama administration, bemoaned the deterioration in the economy with the concomitant depreciation of the Cedi, warning that the local currency could hit GHC4 per dollar in the coming months if urgent remedial measures are not put in place quickly to stem the tide.

“Last week, while awaiting a flight at Lungi International Airport, I chanced on an article in The Business Africa magazine which posed a rhetorical question: “Is Ghana moving backwards?” In that same edition of the magazine, it was revealed that Ghana was just a step better than South Sudan (a war ton country) as countries with one of the worst performing currencies in Africa.

“Back home, the banks are already speculating that the GHC is going to hit GHC4 to a dollar in the next few months. Already the worsening condition of the Cedi is having a big toll on the lives of the ordinary “Ghanaian and the business community. The rate at which prices are rising is worrying, even for the most objective onlooker,” Archer disclosed.

The Enquirer CEO, who has won several awards both local and international in his heydays in the field of journalism as a result of his crack investigative stories, also pinned the blame of the faltering economy and failing government to the President’s gatekeepers.

“The more brilliant the President becomes at explaining and cracking his brain about the state of the economy, the more I become worried about the structure of his government. I am convinced that there is something fundamentally wrong with the President’s Gate-keeping set up.

“When I heard rumours about a possible shuffle or reshuffle in the wake of the economic crisis, I was hoping to see a shuffle or reshuffle that will strengthen certain key Ministries and most importantly the strengthening of the President’s Gate-keepers at the Presidency.

“I hear things like “The old man has a way of communicating with the people” or He has that ability to communicate with the people.” But I am afraid, the more I hear that, the more I feel there is something fundamentally wrong with the gate-keeping structure at the office of the President, which allows the President himself to be the one who has to spend so much effort in explaining and fixing the economy.

“Currently, there is a huge army of officers at the presidency, who are Presidential Staffers. When you see the background of some of them, it appeared that the title “Presidential Staffer is given to someone the presidency doesn’t know where to send him or her. Or someone you cannot appoint to any position.

“Times are hard, and I will take advantage of my background as a system analyst to offer some few suggestions about what the Presidential Gate-keepers structure should look like.

“First, I will suggest that the “Office of the Chief of Staff” at the Office of the President be considered more as a “Secretariat of the Chief of Staff” at the Office of the President where the possible experts and consultants and Presidential Staffers, with specific portfolios, work around the clock to coordinate the most strategic Agencies and Ministries assigned to them.

“The secretariat should consist of Staffers/Consultants (Not Presidential Spokespersons) responsible for the Ministry of Finance and Economic Planning, National Security, Ministry of Justice/Attorney General, Ministry of Education, Ministry of Health, Ministry of Agriculture and Communication Strategy.

The Chief of Staff’s Secretariat at the Office of the President should be set up as proper coordination machinery for the above-mentioned strategic Ministries and Agencies and also serve as a proper filter for information that finally gets to the President.

“The way things are, many times Terkper is constantly briefing the President directly on many economic issues. This scenario exposes the President to all manner of vulnerabilities and it doesn’t take a Superman analyst to foresee that.

“Under the current state of affairs, the Office of Chief of Staff is very weak in its administrative coordination and oversight on the President’s key appointees,” he said.

According to Archer, “the Chief of Staff’s Secretariat at the Office of the President at this moment should have the heavyweights who understand the economy and could act as a sifter of all the policies being pursued by the isolated Finance Minister Terkper and also guard and guide the Minister and the Presidency on the way forward on the economy. He pointed out that “retired Finance Ministers Dr. Kwabena Duffuor and Dr. KwesiBotchwey and economic guru Dr. Nii Moi Thomson are the kind one would want to see as the Economic Consultants/Presidential Staffers. This kind of team would require a Chief of Staff of the caliber of the Late P.V. Obeng.

Clearly, the above analysis on the set up of the office of Chief of Staff by Raymond Archer is an indictment on the performance of the current Chief of Staff, Mr. Prosper Bani.

Mr. Bani has come under severe criticisms from within the ruling National Democrat Congress for (NDC) poor performance since he was catapulted into stardom by President Mahama immediately after he was sworn in after the 2012 elections.

He is being accused for the numerous gaffes and administrative lapses witnessed in the Mahama administration, having being described as a ‘stranger’ in the ruling NDC.

Archer’s diagnosis of the nation’s intractable economic distress also indicted the performance of the current finance minister Seth Terkper and is a wake- up call for President Mahama to make amends in order to change the direction of the economy for the betterment of the ordinary people whose patience are gradually running out.

Ghana’s economy after one of the spectacular performances in 2010 through to 2012 came under severe fiscal challenges in 2013 as a result of election-related spending in the last quarter of 2012.

The economy experienced a budget deficit of about GHC8.5bn in the fiscal year 2012.

Despite one of the severest austerity measures, the budget deficit in absolute terms became larger in 2013. At GHC9.5bn, the budget deficit became the largest in the economic history of the country. Analysts were spooked with the level of budget deficit in 2013 considering the fact that the year was not an election year and therefore there was no election-related spending. Again, the fiscal year 2013 experienced punishing fiscal consolidation measures including cut on spending and increases in taxation.

An economist familiar with the Ghanaian tax system told The aL-hAJJ on condition of anonymity that taxation are meant to raise revenue and not to collapse businesses and create hardship among the people. Any tax policy which does not follow this basic principle will be counterproductive and inimical to the stability of the economy.

“If people die or are hurt and businesses collapse as a result of wrong tax policies, who will be there to pay the taxes and what are the implications to the economy?” He asked rhetorically.