The Free Lunch Is Over

When the NDC party came to power after a long hiatus in the political wilderness, nobody expected the journey ahead to be smooth sailing, the previous NPP government might have done an extraordinary work during its eight years stewardship of this country, however there was no guarantee that the legacy of good work by the previous administration would also be the fate of this new NDC government. Electoral promises to wine and dine the electorate have their place, but reality is the ultimate tester which determines either the failure or indeed the success of any promise.

One of the most significant electoral promises which the NDC party made to the electorate during the 2008 election was that the price of petrol, which was being sold at approximately ¢3.50 per gallon would be reduced to ¢2.00 per gallon and did they fulfil this particular promise after they won the election?, well after the election the price of petrol which was tagged at GH¢3.69 per gallon did indeed enjoy a price reduction of 24.11% when it got priced at GH¢2.80 per gallon, while diesel enjoyed a 33.75% price reduction from GH¢4.00 per gallon to GH¢2.65 per gallon.

One campaign promise kept, even though this change in prices would be somewhat temporal.

Now fast forward to the present and petroleum prices at the retail have jumped 30% in line with price developments at the global crude oil market front, a litre of diesel and premium petrol is now be sold for Gh¢1.1206 and Gh¢1.1141 respectively and the Ghanaian consumer is outraged and the question is why?

Some say that the price of crude oil has jumped from $447 per metric ton to $666, hence the increment in the prices of petrol, whilst some economic experts and analyst are of view that this is the work of the IMF, but the truth of the matter is that Ghana broke and that the country can no longer afford to subsidize anything any more. This is due to the fact that the previous NPP government which received $1.316 billion in loans and grant, after cleverly managing to increase our GDP from $3.94 billion in 2001 to $ 16.1 billion in 2008 failed to transform the nation's current account deficit into a current account surplus, which it could have done by saving as opposed to investing, in other words cutting down on imported goods and services, whilst increasing domestic goods and services to better position and strengthen the nation's economy on the global front.

The previous government also left a budget deficit of $1.5 billion, thusly meaning that the current NDC administration inherited a subsidiary budget already in the negative and therefore wouldn't able to to subsidize the Tema Oil Refinery (TOR) to ensure the stability of fuel prices in the country. The tragic side of the whole affair is that, whilst the world's economists were anticipating a global market recession at the beginning of 2007 and therefore cautioned the active participants within the global market to be conscious of their expenditures, not too much government's took heed to this favourable advice, including our very own NPP government, hence our current predicament.

As a matter of fact, if we look at the nation's gross national income which was a little bit over $11.8 billion in 2008 plus the $1.316 billion received in loans and grants, with the right management and entrepreneurship skills in place, any future loan request or borrowing from either the World bank or even the IMF shouldn't have been necessary at all, but then again I guess that the NPP government felt that they inherited a country already broke and in crisis and therefore running the country aground would probably make no difference, because really, if we consider all the monies made by this country between 2001-2008, the country has absolutely no business going to the IMF for financial assistance had it saved, but no.

Anyway, let's use the gross incompetency and mismanagement of our economy by the previous NPP government to properly advise ourselves.

And as for old man Atta Mills, if he is not up for the job that has been assigned to him, then he should by all means resign, because the issues facing this country is not both spiritually caused or oriented for him to wish that the country was a prayer camp, where prayers would offer a much needed solution and even if that was the case, hypothetically speaking, then let's all better hope that the God to whom he is directing his prayers turn out to be a better economist or an economic adviser than these spatch cocks in black face Oxford Economic graduates, who are both in charge and determining the affairs of commerce and trade in our government. I personally prefer the Makola market traders, because they have enough common sense to know that trading without saving equals to either the IMF or the World bank.