Hardi Yakubu writes: Don’t be deceived, GDP growth means absolutely nothing to you

The Minister of Finance is set to present the 2020 budget to Parliament on Wednesday, the 13th of November 2019.

Among others, he will narrate and tout how much the economy has grown over the last year using the measure of Gross Domestic Product (GDP).

The Gross Domestic Product is the sum total of all goods and services produced in Ghana over a period.

We are told that Ghana’s GDP has been growing over the years and that it will record the highest growth rate in the world in 2019 at a projected 8.8%.

But don’t be excited. And don’t be deceived. What you need to do is to ask the question, ‘whose interest is Ghana’s GDP growth serving?’. In order to answer this question, you have to ask two other questions. First, what is driving the growth? And second, who owns the drivers of the growth? Your answers to these questions will reveal to you the grand deception inherent in our economy.

The main drivers of the economic growth in Ghana are oil, gold and cocoa. Over the years since the discovery of oil in commercial quantities, the GDP has been propped up. In 2011, Ghana became one of the highest economic growth rates in the world, at 14%. High levels of oil production and high oil prices lead to high GDP figures and the vice versa is also true.

The next driver of economic growth is gold. After South Africa, Ghana is the second largest producer of gold in Africa and 8th in the world. All seems well and good until you ask who owns the oil and the gold? The major players in the oil industry are Tullow Oil from UK, Kosmos Energy from US, Anadarko Petroleum from US.

In most of the fields, Ghana government only has 10%. On Gold, 70% of production and export is controlled by five companies – Newmont Ghana from America, Goldfields Ghana (owned by Glencore, British company headquartered in Switzerland), Chirano Mines (owned by Kinross Gold Corporation from Canada), Golden Star Resources from Canada and AgloGold Ashanti (owned mainly by American interests). You just need to check Obuasi or Tarkwa roads (where gold has been mined for more than hundred years) to see that truly our gold is primarily benefiting others and not us.

The only driver of the economy we seem to have much stake in is cocoa. But even that is tricky. Our farmers produce the cocoa beans but that is not where the money is. The cocoa bean market is worth only $10 billion annually as compared to the cocoa product market (which comes from processing) worth $100 billion. The processing is done by mainly foreigners – Real Products limited (an Ecuadorian company), Cadbury-Kraft Ghana (owned by UK multinational Kraft Foods International), Cargill Ghana (a subsidiary of Cargill International, an American company), ADM Cocoa Ghana Limited (a subsidiary of the American company Archer Daniels Midland Group). Only Cocoa Processing Company and Plot Enterprise Ghana Limited are Ghanaian.

A road in Tarkwa. Photo credit: A1 radio

So you see, when the Finance Minister boasts about GDP growth, you should take it with a pinch of salt knowing full well that the growth means nothing to you as a citizen of Ghana. Ask him, ‘growth in whose interest?’

To achieve economic freedom, we need to take over ownership and control of our economy. We cannot have so much resources and still be a poor country where at least 9.2 million cannot afford GHC 5 a day.

Hardi Yakubu is the Fighter-General of the Economic Fighters League