Ghana: Things Fall Apart For The Shining Star

The frontpage headline of the Ghanaian newspaper, Daily Dispatch of 16th September, 2011 reads: Ghana's Economy is one of the Fastest Growing ones in 2011 – MoFEP. That sounds like some cruel joke in today's Ghana where there is crunching economic hardships and lots of gnashing of teeth.

Ghanaians shake their heads and wonder why everything seem to have suddenly gone awry with their country.

Once a promising star in the African firmament, Ghana is experiencing debilitating economic woes not seen in a long time. Very few can remember when things were this bad.

From rampant, out of control inflation to parlous electricity supply, things are not going well with the Black Star of Africa. Citizens feel affronted that close to sixty years of self-governance, their country still cannot generate and distribute enough electricity to power its disarticulate industries. They cannot understand why their well-endowed country cannot give its 24million citizens potable water.

What however seems to gall most is the extensive corruption which seem to have become an albatross strangling the life out of the country. Hardly a day passes without one revelation of one huge corruption case or the other in one government department or the other.

The latest case was the discovery that officials of the National Service Scheme (NSS) have turned the scheme, set up to instill patriotism into Ghanaians by making them serve a one year national service, into a milk cow. They inserted ghost names into the registers and bilked the state millions of cedis. It later emerged that NSS officials tried to bribe officers of the Bureau of National Investigation (BNI) charged to investigate the malfeasance.

Ghanaians were not amused, and they have good causes not to be.

The NSS scandal is just one in the long list of corruption cases unearthed over the months.

What worries Ghanaians most is that despite the huge hue and cry, no one has served a jail term for stealing millions from the public purse. This in a country where petty thieves receive stiff jail terms, sometimes in hard labour.

Citizens have reason to be distressed. Official figures say that the country spend about 70% of her income on recurrent expenditures – that is to pay salaries and allowances for the about 600,000 civil servants. That leaves only thirty percent for capital expenditure. This has resulted in collapsing infrastructures. Many roads in the country are bad including those that lead to food-growing areas and areas that produce the minerals that continue to fuel the nation's purse.

Ghanaians shake their heads in amazement at the brazenness of officials to loot from the commonwealth. They know that they do their best to take good care of their public servants. For example, Ministers and senior civil servants in Ghana ride better and more expensive jeeps than their counterparts in Germany or the Netherlands – two countries that provide the country with budgetary support. The cavalcade of the president of Ghana is longer and much more luxurious than those of the heads of states or governments in Europe. This is despite the fact that most part of the country lack good roads and many citizens lack access to potable water and electricity.

While true that corruption has been a permanent feature of Ghanaian life since the advent of multi-party democracy in the fourth republic, the current government appears to have stolen all the aces in the corruption department. The list of corrupt cases under the government is long. So ubiquitous is corruption in Ghana today that the AFRICANWATCH magazine once dubbed the country “The Republic of Corruption,” much to the chagrin of officials.

Ghanaians, like Africans, are used to bad governance and they can live with it, what is difficult for them to abide is the perception that the current government lacks policy focus.

Erratic policies: Government officials are never short of catchy phrases and fanciful slogans. One of them is the professed desire to make Ghana the Gateway to Africa. Nothing is wrong with that except that officials' pronouncements clash with and contradict stated official policies. Any businessman will tell you that Ghana is the most expensive place to do business in West Africa. It cost more than three times to clear a car from Ghana's Tema port than from Nigeria's ports. The neighbouring Lome and Abidjan ports are free-ports.

Again, officials from the president down tout Ghana's as investment destination for Africa. Again nothing is wrong with that except that they fail to read Investment 101 which says that no one will invest in economy that lack basics like reliable electricity and good roads.

It is difficult to imagine a serious investor, outside of the speculative and extractive industries, coming to put up shop in the country.

Little wonder that the country import virtually all of her domestic and industrial needs.

Economic crises: The vice-presidential candidate of the main opposition party, the New Patriotic Party, Dr. Dr Mahamudu Bawumia, is an economist of some repute. On two occasions he gave lectures where he warned of impending economic doom unless the government change course. As is usual, government and ruling party communicators tore into him. Totally ignoring the economics and statistical facts and figures he presented, Dr. Bawumia's person was ridiculed.

Other patriotic Ghanaians who advised the government met the same fate. From the president down, officials pat themselves on the back and sang their own praises.

Somehow, it appears the critics were right. First came whispers that the government was contemplating inviting the IMF back in to give what was dubbed technical advice. It later emerged that the government was negotiating with the IMF for a full-blown support.

The government stance baffled many Ghanaians as it came few short weeks after the same government assembled the best brains in the country to draw up economic guidelines dubbed the Senchi Consensus, which it said would be faithfully adhere to.

The question asked is why waste scarce money and resources on drawing up an agreement which government had no intention of honoring?

Conflicting signals from high officials did nothing to ally citizens' fears.

Deputy Minister of Finance, Mona Helen Quartey and Senior Economic Advisor to the President, Dr. Nii Moi Thompson, first denied that the government was considering an IMF bailout move. Ms. Quartey told international newswire, Bloomberg that “we're not considering an IMF loan at this time.” Dr. Nii Moi Thompson told Joy FM that the government seek only “technical expertise” from the IMF.

Even the President himself initially categorically denied that his government was going to foist an IMF programme on the country.

“I wish to take this opportunity to state, with great emphasis, that as President, I have not taken any decision to enter our country into an IMF programme,” he stated during the Economic Forum held at Senchi which came up with the Senchi Consensus.

He appeared to reverse himself during a trip to the US for the US-Africa Leaders Summit in Washington DC, where he explained that his government took the decision “because there was the need for policy credibility and confidence from the international financial institutions to restore economic stability and growth.”

“We are going to discuss with the IMF how we can turn the deficit around quickly and create the kind of confidence even in the short-term narrative. We are taking subsidies off fuel and the utilities, streamlining the spiraling public sector wages. We are working to improve revenue collection and efficiency in collecting taxes and also reforming the public financial management system.” the President stated.

Sadly, it appears that absolutely no lesson was learned from the over two decades the country endured punishing austerity measures imposed by the Bretton Wood institutions, which resulted in the total wipeout of the middle-class, the fire sale of State Owned Enterprises and the collapse of the currency to the point of inutility.

In middle October, President Mahama told his compatriots to brace themselves for measures to be introduced in January 2014 which, he hoped, would be the last time the country will turn to the IMF. The president told Ghanaians that the measures were likely to benefit the economic and improve living standards without telling them on what empirical data his hopes were based.

It looks like a case of the triumph of optimism over experience.

Warnings of concern from citizens
The Secretary-General of Ghana's umbrella Trade Union Congress (TUC) warned the government in his May Day speech: “Your Excellency, times are hard; the prognosis on the economy is not good either, but we must at this point resist the temptation to seek IMF bailout. As we have stated, it is the IMF-sponsored policies that have brought us almost to the brink. No country has developed following the advice of the IMF. Resorting to the IMF for financial support was a mistake we made in the past. We must take responsibility of this mistake and find solution to our problem.”

Dr. Anthony Akoto Osei, a Finance Minister under the Kufuor administration, warned Ghanaians to brace themselves for job losses, hikes in utility tariffs and general increments in the prices of goods and services when IMF measures are imposed.

High Petrol prices: To much fanfare and blaring of trumpets Ghana joined the club of oil producing and exporting nation in 2009. But since then, it looks increasingly like that the leaders learned absolutely nothing from their counterparts in Nigeria and Angola, where nature-given resources have turned into resource curse.

Ghanaians were, naturally scandalized to learn that the agreements the government of president John Kufuor signed with the oil companies gave Ghana a paltry (some call it insulting) ten percent of share of the revenue. Not only that, the agreement also included such proviso that the oil be shipped out in their crude form. The agreements were to last twenty years.

It is more than sad that Ghanaian officials refused to learn from the mistakes of their neighbours, and also from the ample warnings by patriotic Ghanaians who called for prudent management of the oil wealth.

For example Ghana's largest daily, carried three pieces in Ghana's Daily Graphic issue of December 2, 2009, which should have guided the country's oil managers.

In the said edition, Ghana's "Biggest selling newspaper since 1950," blared in its front-page: "SCRAMBLE FOR GHANA'S OIL."

The story tells how two Western oil multinationals (ExxonMobil and BP) are embroiled in a titanic struggle over Ghana's emerging oil industry. The two titans are struggling to buy Kosmos Energy's one-quarter share of the Jubilee Oilfields, which are valued at more than $4 billion.

The story then goes on to tell how the Ghana National Petroleum Corporation (GNPC) is struggling to look after Ghana's interest by wading into the buyout dispute. According to the paper, the director of exploration at GNPC, Mr. Thomas Manu, vowed that: “The GNPC is looking at Ghana's interest first, just like other companies will look at their shareholders' interest. We are committed to ensuring that Ghanaians derived the maximum benefit from the oil find... and in so doing the GNPC is mandated to ensure that the country derives the maximum benefit from its hydrocarbon and petroleum resources.”

Apparently taking its cue from Mr. Manu's speech, Ghana's largest circulating newspaper editorialized: “However, any arrangement in which the state or the government does not have a significant stake in or control of the entities or processes dealing with the exploitation of these resources and in which it cannot, therefore, procure a significant portion of the benefits accruing to improve the well-being of the people cannot be said to be in the national, let alone people's interest.

We have had many examples of oil-rich nations producing millions of barrels of oil a day but with the mass of the people living in abject poverty. One can just take a look at some of our oil-rich neighbours. While corruption and greed among the political elite of these nations may be cited as the causes of such an unhealthy state of affairs, lack of effective control over the resources is a contributory factor.

In our own country, we have had the experience of mining gold in Obuasi, Tarkwa, Prestea and other places but the state of those areas and the lives of the vast majority of the inhabitants are nothing to write about.

This is again partly attributable to the fact that the bulk of the wealth derived from these mines are exported out of the country by the multinational mining companies and their highly paid expatriate staff. The royalty and other entitlements paid pale in significance to what is repatriated outside the country.” (Daily Graphic, December 2, 2009, Editorial)

And in one of those magical coincidences, Prof. S. E. Anka, writing to the same paper on the same day had this to say in a letter to the editor titled: "Oil and gas find," (panacea to Ghana's economic recovery?): “On September 17 and 18, 2009, there was a conference on "Meeting Ghana's Economic Challenges in the 21st Century: The Discovery of crude Oil and Gas in Ghana," organised by the Society of Petroleum Engineers (SPE) at the Teacher's Hall, Accra.

Many interesting issues were raised, but the one that I want to comment on is the revelation by the Deputy Minister of Energy that the crude oil would be off-loaded off-shore into ships to be taken away for refinery. This arrangement is for 20 years! How many Ghanaians are aware of this arrangement? Does this arrangement favour Ghana? Who, on Ghana's side, endorsed this arrangement? Why can't the appropriate refinery be built in Ghana? In refining crude oil, there are many by-products. Who is going to benefit from those by-products? Won't the setting up of a refinery in the Western Region provide the jobs people are expecting from the oil and gas find?

Our numerous natural resources have not turned our economy around all these years. The oil and gas will not, unless we add value to them. Don't we see that we are enslaving ourselves by the sort of agreement we sign? What is wrong with us?” (Daily Graphic, December 2, 2009, Letter to the Editor, p. 9)

Despite all the warnings, officials did not pay a heed.

Today very sadly, Ghanaians pay more for petroleum products than before their country discovered oil.

Citizens can understand and try to cope with economic downturns. What is difficult to deal with is when they are suddenly buffeted with every manner of economic hardship, and the government does not appear to know what it is doing.

The government has hiked taxes on all taxable products and services, yet citizens receive abysmal services from providers.

Example is electricity which saw price hikes almost every other month in what officials dubbed “automatic price adjustments.” Despite the huge bills they receive and pay, citizens are still deprive of regular supply, with the providers engage in blame game.

It is pretty sad that leaders in Africa continue to apply textbook methods to solve economic difficulties when experience teaches that every nation that succeeded applied unorthodox methods to achieve economic greatness.

It is sad that a once-promising country like Ghana has seen its fortunes so radically reversed by officials that campaigned vigorously on having answers to all the country's shortcomings.

Plug for Femi Akomolafe
Femi Akomolafe is a Freelance writer, Film & Video Documentary Producer, IT Consultant and Web-Designer.

His highly-acclaimed books (Africa: Destroyed by the gods,” and “Africa: It shall be well,” are now available for sales at the following bookshops/offices:

1. Freedom Bookshop, near Apollo Theatre, Accra.
2. The Daily Dispatch Office, Labone - Accra
3. WEB Dubois Pan-African Centre, Accra
4. Ghana Writers Association office, PAWA House, Roman Ridge, Accra.

They are also available on the internet. Here are useful links:

1. Africa: it shall be well: http://alaye.biz/africa-it-shall-be-well-introduction-in-pdf/

Africa: it shall be well is available for sale on Kindle books at this link: https://www.createspace.com/4820404

A FREE Chapter of 'Africa: It shall be well' could be downloaded here: http://alaye.biz/africa-it-shall-be-well-a-free-chapter/

2. Africa: Destroyed by the gods (How religiosity destroyed Africa) http://alaye.biz/africa-destroyed-by-the-gods-introduction/

Africa: Destroyed by the gods is available for sale on Kindle books at this link: https://www.createspace.com/4811974

A FREE Chapter of 'Africa: Destroyed by the gods' could be downloaded here: http://alaye.biz/africa-destroyed-by-the-gods-free-chapter/

Read a review here
Femi maintains a blog @: www.alaye.biz/category/blog

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