Ghana's and Afrika's economic growth - for whom?

By Kwame Osei
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By Kwame Osei

4/19/2012 5:57:33 PM -

Over the last few years, economies in Afrika have grown by on average by 6% and will continue to grow by this amount for the rest of the decade.

In oil producing countries like Ghana it is expected to grow by more than this.

This is in sharp contrast to the 1970's, 1980's and early 1990's when Afrika experienced negative economic growth due to military coups and economic mismanagement.

The new Afrikan economic renaissance is also in sharp contrast to what is happening in North America and in particular the European Union (EU) which is currently experiencing unprecedented levels of high unemployment, low interest rates, low inflation and stagnant growth.

So with Afrikan growth at unprecedented levels, does it really signify a golden age for Afrika and will the ordinary Afrikan benefit from this golden era and see a real sea change in their living conditions and general wellbeing in terms of health, education and social provision.

This article will seek to delve further into this issue and use Ghana as a case study.

Since the year 2000, Ghana has experienced levels of economic growth not seen since 1957-1966, that has progressively increased the Gross Domestic Product (GDP), Foreign Direct Investment (FDI) of the country and enhanced its appeal in the sub-region.

Ghana's economic growth has also seen an expansion of certain sectors of the economy in areas such as Banking/Finance and now Oil/Gas which has created a plethora of opportunities whilst at the same time enhancing employment opportunities.

Ghana has also recently enjoyed relatively low interest rates.

However, despite these impressive economic indicators the truth be said is that the reality of the situation is that the perceived economic growth that Ghana and by extension Afrika is enjoying is only benefitting a few people and secondly western and Asian multi-national companies.

To further buttress the first assertion made a soon to be released report by banking giant Standard Chartered that had excerpts of it featured on BBC Business on the BBC's World Service estimates that “there are 368 million people in Afrika who live on less than US$1.25 a day”.

What this excerpt means in reality is that despite impressive economic indicators, attempts to halve poverty in many Afrikan countries including Ghana, which incidentally is one of the Millennium Development Goals (MDG's) has not been achieved.

Secondly in terms of foreign multi-national companies benefitting from Afrika's perceived economic renaissance, let us again use Ghana as a case study.

Gold:
Ghana is Afrika's second largest producer of gold. In the days of Dr. Kwame Nkrumah, Ghana's first president, Ghana enjoyed up to 49% of revenue form Gold exports and under General Kutu Acheampong it was over 50%.

Today as a result of bad strategic decision making by subsequent Ghanaian leaders and insidious geo-political/economic games by western governments, Ghana has virtually sold off all its gold concerns save a paltry 3% it receives as royalty payments.

This is scandalous and completely unfair in the light of record gold prices and shows us that contrary to perceived opinion, Ghana as a nation does NOT benefit one iota from gold mining but rather the nefarious western mining multi-nationals.

In actual fact, Ghana benefits more from Bush meat (Akrantie) than gold.

Oil:
Ghana became the latest country in Afrika to produce oil in commercial quantities in November 2010.

According to data released by Jubilee Oil fields more than 30 million barrels of oil has been produced since that date.

However despite relatively strong prices on the oil market, a question one must ask is what Ghana's share of this oil revenue is. According to information released just recently the government of Ghana made US$450 million whilst Tullow Oil, the Anglo-Irish oil company, which has one of the biggest stakes in the Jubilee oil field, announced just recently that it had made a profit of US$1.3bn from the Jubilee oil field in 2011.

Therefore these two examples show quite clearly to the readership just who benefits from Ghana's and by extension Afrika's rich mineral resources.

Conclusion:
To sum up then using Ghana as a case study, if the economy of Ghana is apparently booming with unprecedented rates of growth and investments coupled with seemingly impressive macro-economic indicators then why is it that

1. There is acute poverty in many parts of the country especially evident in the capital and the North (Northern, Upper East and Upper West regions).

2. The majority of Ghanaians live on less than US$5 a day.

3. As a nation Ghana cannot feed itself and imports most of the food it consumes.

4. We cannot provide for the vast majority of our people constant and reliable electricity and water supplies.

5. We cannot provide first class quality healthcare for our citizens including the ability to produce our own indigenous medicines rather than importing often times contaminated foreign medicines/drugs.

6. We cannot provide high quality free education to ALL our children under 18 years of age.

7. Mass unemployment especially youth unemployment has become a cancer in our society.

8. Adequate steps have not being taken to address the housing crisis that the country is facing – there is currently a housing deficit of more than 2 million units.

9. Due to poor waste management techniques, many parts of the country are environmental time bombs. Added to this our major cities like Accra and Kumasi are heavily polluted with massive CO2 emissions.

10. The economy of Ghana is disturbingly controlled by non-Afrikans who repatriate their huge profits to their mother countries and leave Ghana further impoverished.

11. Over 75% of Ghanaians do not have proper toilet facilities in their homes.

12. Access to sanitation is a real problem for the country hence the increases in cholera.

It must be remembered that the economic policies that have crippled both Ghana and Afrika as a whole have been prescribed by the IMF/World Bank including western so-called development partners who history has shown do not give a hoot about Afrikan development and economic emancipation.

For those readers who want to find out more, here are but three reference points.

• How Europe under developed Africa – Dr. Walter Rodney

• Why we must fear the IMF/World Bank – Dr. Joseph Stiglitz

• The Confessions of an economic hitman – John Perkins

The litmus test for any successful economy is when the above points have been achieved with the majority of the citizenry benefitting from them and as a result have seen a marked increase in their quality of live.

Until this has been realized Ghana and Afrika as a whole will continue to be the hewers of wood and drawers of water for others, leaving the vast majority of Afrikan people living impoverished lives.

Disclaimer: "The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of Modern Ghana. The contents of this article are of sole responsibility of the author(s). Modern Ghana will not be responsible or liable for any inaccurate or incorrect statements contained in this article." © Kwame Osei.

Democracy is a big pill. You cannot swallow it if you have a sick throat.
By: Adwoa Ayamba.