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Opinions Fri, 10 Jul 2009

Akwaaba, President Obama: But what will he say to Ghanaians?

Last year, in the midst of the “Obama fever,” another event – by no means as historic as President Barack Obama’s election victory, but remarkable nonetheless – was shaping up in Ghana. In December 2008, Ghanaians went to the polls, for the fifth successive time since the country returned to constitutional rule in 1992, to elect a new president. The outcome: the closest election ever. About 9.5 million votes were cast in a runoff that saw John Atta-Mills beat out Nana Akuffo-Addo by only 41,000 votes. Yes, only 41,000 – less than one-half of a percent. Even more striking is that the elections resulted in a peaceful transfer of power from the incumbent New Patriotic Party (NPP) to the National Democratic Congress (NDC), without a single loss of life. It is the second time in 8 years that such a transfer of power has occurred in Ghana; the first in January 2001 when the NDC lost to the NPP. And in case you were wondering, Ghana is in sub-Sahara Africa, where election results are expected to be disputed and often trigger violence.

For Ghana, this a testament of the progress made in a relatively short span of two decades, and a powerful signal to the world that a new and stable political climate is finally emerging. There are already some dividends: There is now a more open society which, with the help of an increased coverage of mobile phones, is becoming more engaged in social, political and economic issues; a freer press is helping to put a check on government excesses; and an increase in investor confidence is stimulating direct investments. And all that is expected to receive a further boost when President Obama pays a 2-day visit on July 10 - 11, 2009, his first to sub-Saharan Africa (SSA) since assuming the office of the President of the USA. Given Obama’s iconic status, his visit will be seen as an endorsement of the progress in Ghana.

From Ghana, President Obama is likely to implore other African nations, such as Zimbabwe and Kenya, his ancestral country, to follow Ghana’s trail. That is fine, but this is not the time for gloating. Let’s make no mistake about this: Although encouraging, the economic condition in Ghana is pretty far from what’s needed to, first, achieve all of the MDGs, and provide a robust economic environment that will unleash individuals’ “entrepreneurial spirits.” The basic growth-promoting infrastructures (quality education, safe health care, clean portable water, affordable and reliable energy) remains beyond the reach of many Ghanaians; annual per capita GDP is at US$550 – not that much different from the average income at independence in 1957 – yet incomes are much more unequal today. To get an idea of how unequal incomes are becoming, consider this: Daily Graphic, on June 17, carried a story of squatters at Agblogbloshie, a slum just outside downtown Accra, digging themselves deep into filthy waters to collect, for re-sale, diesel oil leaking out of a nearby factory plant. That same week, Villaggio Vista, the luxury residential complex at the Tetteh Quarshie Circle, Accra, showcased their 3- and 4-bedroom condos: asking prices start from $525,000, with the high-end units priced in the mid-$800,000. Such inequities make it difficult to sustain economic development.

So what should Mr. Obama say to Ghanaians, Africans and their leaders? Whatever is Mr. Obama’s policy agenda for sub-Saharan Africa, or the purpose for this visit (there is talk of the “pot” of oil that Ghana recently struck), most observers will agree that it is in the interest of Africa and the world that “success stories,” such as Ghana’s, do not lose the momentum and the gains made so far. Each time progress is derailed in any part of the continent, the consequences have always been tragic. What Africa really needs now is a “develop and hold strategy”: Simply put, the progress in Ghana must be complete and sustainable. That means it must be underpinned by strong institutions that not only protect civil and property rights, but also hold the government to account. The deals made with multinationals firms in its extractive industries (e.g., gold, timber, and now oil), must be fair, transparent, and have a chance to stimulate the economy. A positive message from Mr. Obama on these issues will energize civil society groups, think tanks and NGOs (such as the CJA, CDD and WACAM) who have been calling for reforms that promote better opportunities for all.

More power to the people!

With so many land-locked nations, rugged landscapes, weak institutions and some harmful cultural practices, there is no question that sub-Saharan Africa faces huge developmental challenges. In many places, these constraints were compounded by colonial policies that not only deprived the continent of some of its able young men and women, but also nurtured the worst extractive institutions, and drew artificial lines of boundaries that, if not caused, certainly reinforced mistrust among nations and neighbors. Mr. Obama will see, perhaps for the first time, some of the legacy of the slave trade when he visits the Cape Coast Slave castle. I have no doubt in my mind that he will categorically condemn the slave trade and colonialism.

But we need to move on. Ghana may have been pushed to ground, but we must find smart ways to get up. No amount of foreign aid can achieve as much as our own initiatives. These must start with reforms that empowers and inform citizens to make the right choices; and one of the most needed now is a constitutional amendment that gives individuals the right to choose their own District Chief Executives (DCEs), the equivalent of city mayors, and regional ministers. Back in 1992, the framers of our constitution thought that, for a relatively young democracy, it was necessary to have the president appoint all city mayors so as to promote a cohesive national development agenda. Furthermore, it was argued that direct elections will divide, rather than unite, communities since too many were uninformed to make the right decisions. Hogwash!

Ghanaians know that the real reason for this flawed decentralization set-up is so that the President can have 167 DCE- and 10 regional ministerial-posts as “jobs for the boys.” But this is a bane of our development. Direct elections of DCEs will not only promote competition of ideas, but also ensure that our local governments become more accountable to the people. More importantly, the elected DCE will refuse to take the fall for any policy failures of the central government, creating an automatic checks and balance within the governing hierarchy. Cognizant of the impact of their decisions on their communities, people will seek the information needed to make the right choices; without blaming anyone for their own their mistakes. When individuals are marginalized from the most important decision-making processes, they blame others for what goes wrong, and often resort to violence. This is, arguably, the most powerful case for direct elections of DCEs.

However, alone, it cannot be the panacea. Elsewhere, I have argued that by leveraging the expanding coverage of mobile phone networks, the central government can create an efficient accounting and auditing systems to promote transparent local and central governments.

Fair deals and equitable distribution of resource rents

At the start of Ghana’s economic reform programs, the path to growth was expected to be paved with the rents from the extractive industry (gold, timber, and now oil). Foreign direct investment responded to powerful incentives that were packed into the new Mining Act of 1986. But two decades later, the hope for mining to become a catalyst for economic growth has been more or less unfulfilled. Yes, there have been some gains, but they seem to be outweighed by large negative consequences. For example, inadequate protection of property rights has led to paltry sums of compensation to farmers who lose their cocoa lands to mining concessions. Consider this: it is estimated that a cocoa tree yields about half-bag of beans each year, a GHc50 (Ghana cedis) value, and a tree can last for about 40 – 50 years. Yet, average compensation is about GHc10 per tree.

And this is just the beginning. Mining firms continue to pay one of the lowest royalty rates in the world: 3% of profits; with very little going to the mining communities who have to deal with huge negative externalities of mining activities – frequent cyanide spillage into water bodies; lost of farmlands with little, or no, alternatives, etc. Interestingly, a decent portion of the royalty is given to local chiefs and their traditional councils “to maintain the dignity of their stools.” Huh? It is time to get serious and build the capacity to negotiate for fair deals. In an increasingly competitive global economy, Ghana’s only edge may lie in its natural resources, and we better make the best out of it.

God’s messengers

Finally, if President Mr. Obama feels emboldened enough to be politically incorrect, he could take a swipe at the growing number “men and women of God” promising better economic outcomes to innocent Ghanaians. Collectively, these “crooks masquerading as prophets,” have succeeded in instilling so much fear into Ghanaians such that they have nowhere to turn to except give their next dollar to a pastor. Along the way, pastors continue to sow and nourish seeds of mistrust among family members and neighbors. You lost a job? Blame that witch of an aunt. Recently got denied a visa by the US Embassy? The neighbor’s ‘voodoo’ was responsibly for that too.

With so much fear and little trust among neighbors, how can the nation build the social capital to enhance economic relations and growth? 75 years ago, Franklin Roosevelt recognized the devastating effect of fear at the height of the depression when he told Americans that “the only thing they had to fear was fear itself.” Religion can be a powerful tool for good. Unfortunately, it has become a weapon of mental enslavement of millions of Ghanaians, and it is time Ghanaians themselves of these chains, completely.

Ghana is great nation with lovely people, rich culture and so much potential. It needs good and honest leaders. In his inaugural speech, President Obama admonished Americans “to set aside childish things …. .; to carry forward that precious gift, that noble idea, passed on from generation to generation: the God-given promise that all are equal, all are free, and all deserve a chance to pursue their full measure of happiness.” No group of people needs this poignant message more than the political, traditional and spiritual leaders of Ghana and the continent of Africa.

Edward Kutsoati is Associate Professor of Economics at Tufts University and a regular columnist for www.AfricanLiberty.org. He can be reached at edward.kutsoati@tufts.edu

Columnist: Kutsoati, Edward