Opinions Tue, 18 Feb 2014

Is Mahama to blame for Ghana’s weak economy? Yes but…

Because Ghana is operating an Executive Presidency, the President is to blame for any economic mishap. All former presidents Rawlings, Kufuor and late Mills were blamed for economic woes in their terms in office. This is because during electoral campaigns the presidents made promises and vowed to fulfill in accordance with their parties manifestoes which has turned out to be close to impossible, due to a lot of factors and situations that were not well managed. However, during the reality check on the performance of the economy, being run through many appointees, the president is required to open up to the nation. He must come out to explain the causes of his failure to achieve his campaign targets.

In the case of President Mahama, he has come out to admit that there are difficulties facing the economy. But he continued to explain that it is nothing unusual because economic problems are currently universal and hitting hard, nations high and low hence we are all going through similar difficulties. Before president Mahama and the late Mills came to power in 2009, Ghana owed about $9billion at the time the nation was not an oil economy but had cocoa and gold. Today, Ghana is said to owe $15bn with some people stating our debt profile to have leaped to $25bn.

Government has come out to explain that, it is the investments which have all been done in the foreign cash like infrastructural development such as roads, gas projects and other developments all over the country.

Presently, we are suffering from over expenditure on government budget allocations. The public accounts committee has also uncovered in government offices an illegal use of government funds. Interest payments on loans owed to internal and external creditors are mounting to the extent of becoming difficult to manage. Ghana is suffocating on chocking air from interest payments, a situation that requires collective intervention. “All hands on deck” is the clarion call by all well meaning citizens.

Ghana has slipped away from a single digit inflation making it impossible for government firms, importers and traders to make informed projections with their local and foreign transactions. Ghana’s over dependence on imports has affected the value of our local currency to the extent that the cedi is in a free fall against the dollar and other currencies.

The measures introduced by the Bank of Ghana, BoG to halt the free fall of the cedi can only help matters if every private and government firm and establishment is made to quote prices in cedis instead of dollars. It remains to be seen if the measure would be respected by all in Ghana including our estates developers, hotels, restaurants, traders, sea and airport establishments. Since independence, we have not been depending on home grown development plans but once approved by the Breton woods i.e. the World Bank and affiliates.

We also depend on foreign imports of items that can be produced locally. Interestingly, we learned our tastes from our colonial masters and the western world from whom we seek advice to run our economy. Even when we decided to wean ourselves from our foreign benefactors by going for Eurobonds to finance our programs, we are unable to manage our finances with lots of baggage on judgment debts, dubious loans and grants to unproductive firms. We also spend the bulk of the cash on our benefactors who come as experts and advisors. Government is currently in court to retrieve large sums of money paid to organizations which had non-existent contract with the state. But it is taking some time to achieve that aim.

Ghana is now faced with high tariffs of electricity due to high cost of production and reliance on expensive crude oil to power electricity. Our hope is that the completion of the gas project at Atuabo will be realized on time to provide us with cheap electricity but that seems to have hit a snag. The project would no longer be completed in April as promised us by Dr. George Sipa Yankey, the Chief Executive Officer of the Ghana Gas Company to augment hydro power and provide cheap power to the nation.

We ought to commend the government for completing and commissioning the Bui Dam. But electricity will still be expensive if Atuabo Gas Project said to be 90% complete by the Ministry of Energy and Petroleum fails to provide cheaper gas. The net effect of the current situation is that the cost of doing business would affect cost of living which will eventually affect the pocket of workers, farmers and the general public. As you can see, the issue of solution to economic difficulty must become a collective responsibility. But in the current dispensation, the blame is placed at the doorsteps of the president.

The difficulties we are faced with now did not start with this current government. Yet President Mahama has the responsibility to bring to all, including the opposition, civil society, labor and the business sectors to do the following: organize an all party economic conference to examine the economy and provide solutions without prejudice to the measures already taken by government. This way all involved would get to know their roles in revamping the economy.

The winner takes it all system in the constitution is not good for a nation that need to work together. The advice we wish to give to the president is simple. Come out to do as former president Kufuor once did regarding the size of his government by saying that “When I was not in power, I saw things differently. Today as I am in power, I now know it is not that easy to run a nation especially after promising to help them out of their predicaments”. When this is done, the people of Ghana who are all loving and forgiving might understand and forgive the president.

By: Alhaji Alhasan Abdulai

Executive director


Columnist: Alhaji Alhasan Abdulai