Leader’s bold words point to need for decisive action

By David White and Andrew Ward

At a boutique in a cosmopolitan area of Accra, Ghana’s capital, fashion designer Aisha Ayensu is cheerful about prospects in the first year of the country’s new government. The climate for young businesses like hers has improved and she feels sure today’s generation will hold politicians to their promises.

“We’re actually quite hopeful,” she says.

In another part of the city, the mainly Muslim slum district of Nima, Grace Hayibor sells lottery tickets at a table in an alleyway. She has seen governments and their promises come and go. Electricity and water supplies are erratic, although residents have known worse. But she too is optimistic.

“Things are getting better,” she says. “I hope that in four years we shall see a difference.”

The two snapshots are representative in different ways of a country at a potential turning point in its development.

Expectations are high for President Nana Akufo-Addo’scentre-right administration, with its plans to revive the economy and – in his words – “clean up the business environment”. After a period of slowing growth, high inflation, an unstable currency and a looming debt crisis, his government has a tailwind of renewed confidence, helped by a flow of offshore oil to add to Ghana’s traditional exports, gold and cocoa.

It faces the challenge of delivering on a list of audacious pledges made ahead of last December’s elections. These include a factory for each of Ghana’s 216 districts, a dam for every village in its dry northern regions, and $1m for each of its 275 electoral constituencies.

The government is banking on the private sector to drive growth and job creation, but officials realise the private sector cannot cover everything. With an inherited International Monetary Fund bailout programme in place, it is struggling with strict budget constraints that leave it little room for manoeuvre.

Sixty years after independence, when Ghana led a wave of sub-Saharan nations breaking away from European colonialism, it is one of Africa’s most peaceful and democratic countries. Following a bumpy early period, including five successful military coups in its first 25 years, it has had an uninterrupted series of open elections since 1992, with power changing hands three times between its two main parties.

Freedom House, the US organisation monitoring political rights and civil liberties, gives Ghana the highest rating in mainland Africa. Ghana was the first sub-Saharan country to meet the United Nations goal of halving the proportion of its population in extreme poverty, well ahead of the 2015 target date. It scores well in other development indicators, but has big disparities. Conditions lag behind in the north – which is predominantly Muslim, while the south is mostly Christian – and some inner-city areas, as rural poverty drifts into urban centres.

Since the mid-2000s, UN figures show, Ghana has become a majority-urban society. International observers share with many Ghanaians a sense of frustration that the dividends of democracy have not been greater or progress more evenly distributed.

“It’s not quite living up to its own standards,” says Christine Evans-Klock, UN resident co-ordinator. Recognising Ghana’s candidness about the need for more equal development, she adds: “There’s a lot of commitment, and our message now is: time for implementation.”

The 73-year-old MrAkufo-Addo, elected president at his third attempt, moved quickly to appoint a high-powered core team of economic ministers. Independent commentators were dismayed, however, by a record array of 110 ministerial and deputy ministerial posts and the president’s sweeping use of appointment powers in public bodies and diplomatic missions.

In an early signal of intent, the authorities cracked down on illegal gold mining operations, no longer just artisanal activities but industrial-scale ventures, often with Chinese involvement. Corruption has been a growing problem, a trend experts trace to before the previous centre-left administration. In Transparency International’s 2016 index of corruption, Ghana’s standing was better than most in west Africa but had “significantly declined”.

The spearhead of plans for dealing with high-level corruption is the creation of a special prosecutor’s office, but this has still to be legislated for, budgeted for and staffed.

“It may put fear into a few people,” says Franklin Cudjoe, head of Imani, a think-tank, “but the institutional arrangements for corruption to thrive continue.”

Oil and gas are expected to underpin growth over the medium term. The western port of Takoradi has seen an influx of people, banks, hotels and casinos. But initial excitement in Ghana after commercial oil production started in late 2010 was overdone and led to government overspending.

For most citizens, the impact has been muted. In the first flush of oil production, growth shot up to 14 percent in 2011, the year that marked Ghana’s transition from a low-income to a lower middle-income country in World Bank classifications, ending its eligibility for some aid.

Growth then slowed progressively to 3.5 percent last year, the lowest for 22 years. The government aims for more than 6 percent this year but World Bank officials are more cautious. The IMF’s $918m three-year support programme was originally set to run to April 2018. After mixed signals from the government about when the end date should be, a one-year extension to 2019 was agreed in late August, giving Ghana extra time to put its public finances in order. The government is confident it will by then have demonstrated its competence to run the economy.

A statutory cap for the budget deficit, set at 5 percent of GDP, with the aim of moving closer to 3 percent, is due to take effect next year. Last year’s deficit was more than 9 percent, with public debt at 73 percent of GDP, a ratio that has doubled since 2009. To avoid large upfront outlays, the government is finessing the timing of its headline plans. A pledge of free secondary education has been narrowed down to senior high schools, for those teenagers who qualify, starting this month.

MrAkufo-Addo and his government have a difficult task if Ghanaians’ expectations are not to be disappointed. A bigger question, beyond the four-year term, is how fast the country can achieve the structural change needed to move from its dependence on raw materials to a more diverse modern economy.

Published on Sep 23,2017 [ Vol 18 ,No 908]



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