Increased Commitment to Fostering Prosperity in Africa by Developed Countries:

What does it mean to Ghana?

The last release of “commitment to development index” by the Center for Global Development, a think-tank in Washington DC on October 2008 reveals that the Netherlands, Sweden, Norway, and Denmark take the top four spots thanks to the generating of their foreign aid relative to the size of their economies (The Economist.com on December 12, 2008). Surprisingly, America ranks 17th out of the 22 countries in its commitment to fostering prosperity in the developing world. According to the index, America’s relatively low trade barriers, the generosity of its citizens, private aid flows and policies promoting pro-poor technologies save it from the last place. Australia (8th), New Zealand (7th) and Canada (9th) score well as a result of their good trade and security as well as environmental, technology and migration policies. Again, preliminary estimates released by OECD on 30th March 2009 reveal that there has been increase in development assistance (foreign aid) of $119.8 billion (2008) which is 10% more than in 2007 and is the highest amount ever given. Importantly again, Sweden, Norway, Denmark and Netherlands including Luxembourg have made it to the first five countries contributing more of their GDP to development assistance and the only countries that had above the target of 0.7% (The Economist.com, March 31 2009).

It is of no wonder, considering the credible efforts and contributions of these countries towards the development of Ghana, that the Netherlands, Sweden, Norway and Denmark occupy the top four spot of the index and the OECD development assistance in foreign aid. Among some major projects, programmes and assistance include the Netherlands Government’s $13 million grant to support Ghana’s Urban Water Project which sought to mobilize investment to expand distribution networks. The Swedish Government boost to Ghana’s first industrial-scale biofuels project, Northern Sugar Resources Ltd by promising to import from this industry and this will serve to bolster our industrialization drive. The industry concerned is Svensk Ettanolkemi AB (Sekab), a Swedish green fuels company and has committed to buying the first 10 years of the plant’s production.

What does all these increase in aids and assistance mean to the development of Ghana?

“What Works, What Doesn’t, and Why, poverty reduction efforts would be more successful if donors directed their assistance to the right countries, for aid is “wasted” when it is disbursed to countries with “unsound” policies and institutions”- Accessing Aid

Ghana, despite its well endowed natural resources, remains heavily dependent on international financial and technical assistance. What impacts have this economic assistance from the World Bank, US, Canada, Japan, Netherlands, to mention but a few, made to the economy of this country? There still remains acrimonious and inconclusive debate about the effectiveness of aid in Africa and Ghana to be precised. Is it really true that the country have unsound policies and institutions?

It is important to know that, aid ineffectiveness in Africa and specifically Ghana is as a result of one neglected important internal factor existing now and this is ‘our institutions’. It is completely true that there exist unsound policies and institutions in this country. No matter the predetermined path of reform agenda that accompany these aids, prudent economic policies and good investments in sectors of the economy, aid will continue to be ineffective if these institutions in the country are not restructured and revived. Institutions involve the systems of norms, beliefs, rules and organizations that dictate the social and economic pattern of behavior or attitude and not limited only to our government agencies and bodies. The existing problem now is never the conditionalities attached to the aid, resultant pattern of donor-driven priorities, predetermined reform agenda nor wrong sectors of the economy invested with the aid but the local institutions which involve the people, government officials, politicians and policy makers. The institutions should, therefore, take the lion’s share of this blame and not the donor agencies. We now live in an institutionally created environment where politician’s interest has become self centered disregarding the plight and interest of the country at large and as such sees as normal when misappropriating state funds because the existing law would spare him and go unpunished. How would we expect aid to be effective when there exist a lot corrupt government officials and politicians who in satisfying their selfish ambitions incapacitate the internal efforts of Ghana thereby retarding the growth of the country? Government officials and politicians should have the interest of the country and its people at heart ahead of all other endeavors.

It is worthy to note that, neither comprehensive studies and literature on aid effectiveness which centers on economic policies nor the Paris Declaration on Aid Effectiveness first endorsed on 2 March 2005 could save this misfortune. The best and prudent strategy is a complete and absolute revival of our institutions and building strong institutional capacity which we can do by ourselves since we know better the prevailing conditions on the ground. This will provide a good foundation for aids to thrive and be successful in this country. The government should, as a top priority, make it reforms radical such that whoever contradicts the laid down laws and reforms will go unpunished and be made to face the law. Fifty two (52) good years of independence without significant development is enough and should end now for a new phase of development agenda. The government should introduce robust and radical reforms in the Ministries, Departments and Agencies (MDAs) and Metropolitan, Municipal and District Assemblies (MMDAs) who are the major institutions that formulate and implement developmental projects and programmes with the available aid and assistance. Reviving the Institution should be the new paradigm that will aim at laying a solid foundation upon which the development efforts of the country will lie. It‘s a big mistake and waste of time engaging in blame game with donor governments and multilateral aid organizations on ‘aid ineffectiveness’. The underlying issue is that the poor soil in this country will never support the growth and as such benefits of these aids received. Rather good soil (when institutions are revived and capacitated) will serve to support the aids. Let us as a country concentrate on internal development and that will transform the external outlook of Ghana to the international world and surely Ghana can make it as Malaysia has done so far. The enabling environment should be created for all aid and technical assistance and this will serve as impetus for the development efforts of this country. The present condition and state of the economy means a lot to Ghana because I believe this should virtually not be Ghana’s state. We have indeed failed our past national heroes who struggled and laid down their life for the prosperity of this dear country. We have a lot to offer to transform the economy of Ghana.

In conclusion, let this country shift its focus to development and absolutely abandon the antiquated systems, policies and politics and change our mind-set in the approach to development. Also, the country have to commend the efforts of the Netherlands, Sweden, Norway, Denmark, Canada, US and the promising two Asian Tigers (Japan and South Korea) for their commitment towards the development of this country. We can actually make something good out of these aid and assistance. God bless Ghana

By:

Stephen Yeboah, Department of Planning, Kwame Nkrumah University of Science and Technology, Kumasi-Ghana       email: stephenyeboah110@yahoo.com