Finance Minister Is IMF Captive - Ofori-Atta

Ken Ofori-Atta, Chairman of Databank Ghana Limited says one of the main reasons this nation is still unable to make progress in economic development, is because economic managers of the country, particularly the Finance Minister, rely too much on foreign prescriptions instead of finding internal solutions to the country’s economic malaise.

In the view of Ofori Atta, currently foreign donors provide only 40 percent of Ghana’s total revenue annually, while Ghanaians provide the remaining 60 percent. Yet, Finance Minister, Yaw Osafo Maafo, spends 80 percent of his working time consulting IMF and World Bank officials while he spends only 20 percent of time available consulting Ghanaians for suggestions to solve the economic problems of the country.

Ofori Atta therefore appealed to the IMF/World Bank to release Osafo Maafo from captivity so that he could spend much time consulting Ghanaians for local solutions to the socio-economic problems of the country.

He was contributing to the Development Dialogue Series co-sponsored by the World Bank Country Office in Accra and the Centre for Democratic Development (CDD) with the Institute of Financial and Economic Journalists (IFEJ) and the Ministry of Information and Presidential Affairs as collaborators. The first in the series was held on Tuesday, March 18, with the theme: Empowerment for Development.

After years of Economic Recovery and Structural Adjustment programmes, the World Bank itself has discovered that fighting poverty requires a multi-dimensional approach; that is empowering the poor and investing in their assets. How to expand the capacity of the poor to monitor institutions that determine their future and how to accelerate the decentralisation programme to bring development to the door steps of the vulnerable, formed the thrust of the one-day discussion. “The donors have to release our public officials from captivity, so that they can concentrate on local issues”, the Databank Chairman emphasised.

He said one of the biggest hurdles blocking Ghana’s development is the inability or the unwillingness of Ghanaians to engage the best brains and the utilisation of the unlimited social capital across the country.

Ofori Atta lamented the speed with which the nation destroyed success in the past, while hailing failure. He sees the economic stagnation of Ghana as a leadership crisis and advised this generation of leaders to engage everyone in the nation building effort.

In his view, private sector holds the key to economic future of the country. “The private sector can enhance growth and create jobs, but the sector is often times excluded in development dialogue. Government pays lip service to the private sector, while NGOs view the sector with suspicion”, adds Ofori Atta.

Citing the Irish example of a new social partnership, which raised GDP to nine percent within a short time, he advised the government to reach out to the private sector if the country is to make headway in economic development.

According to Ofori Atta for the country to attain the projected $1000 per capita income by 2010, she needs a GDP of $25 billion per annum, instead of the current $6 billion per annum.

To increase GDP to $25 billion the government will have to create the environment for more Foreign Direct Investments (FDI). He said currently, Africa only gets one percent of FDI, which is shrinking by the day, and countries that do not create conducive environment will be on the losing end.

World Bank Country Director, Mats Karlson supported the need for government to bolster the private sector for economic development. He said making the private sector buoyant is crucial following the disappointment of state-led planning, which decreased productivity, fed corruption and increased vulnerability to the vagaries of international markets.

Karlson explained that the purpose is to increase the life choices of people. “People must be subjects of their own destiny, not objects of someone’s else’s designs”, he emphasised. Karlson’s view reinforces Ofori Atta’s point that the IMF/World Bank must give public officials much time to evolve local initiatives.

Professor Takyiwa Manu, Director of Institute of African Studies, University of Ghana disagreed with those who think private sector has the magic wand for accelerated development. She instead suggested a mix of public and private sector development strategy.

According to Professor Manu, despite the fact that some form of state control of production and services exist in India and China, these countries top the list of emerging economies, and tackling poverty head on.

She said the HIPC initiative is an inadequate response to poverty reduction because after six years of HIPC in Africa, some African countries are still spending about $6 billion annually in servicing debts. She therefore asked the World Bank to support local programmes and stop imposing conditionalities. She asked the World Bank to help improve the quality of education in Ghana.