We Have No Hope Under Mahama’s Economy The Indices Are All Flawed

This country, I am afraid, is on the slippery slope to self-destruction. We are not sitting pretty at all. And that is not the prediction of a doomsday soothsayer. The economy, under Finance Minister Seth Terkper, is failing to respond to treatment and remains in critical condition at the intensive ward. What I call the Mahamean Economic Theory with its Terkpernomics of borrowing to throw at any problem imaginable, coupled with unusually high taxations are combining to make it unattractive to do business in Ghana. And that is official.

The private sector, which officials usually referred to as the engine of growth, has no fuel to turn its turbines. I am told that many companies are re-locating from the shores of Ghana as a result of the harsh economic climate. Instead of appreciating the enormity of the problems their inept policies are piling on the nation, the Chancellor of Exchequer and his immediate boss are behaving like punch-drunk boxers, aiming wild blows at imaginary enemies, and failing big time to appreciate the danger signals.

The situation, I dare state, could be likened to Chinua Achebe's proverbial man sitting by his doorstep with the house ablaze inside, and obstinately arguing against the destructive force of fire.

On Monday, Mr. Seth Terkper called the media to his office in Accra, and virtually beat his chest with the assertion that with the assistance of the International Monetary Fund, the state economy would avoid what he called “the slippery path of previous election years.”

Read the Finance Minister's lips: “The withdrawal of subsidies is helping to consolidate gains. Budget deficit is down to 2.5 percent GDP (Gross Domestic Product); a reduction remarkable,” he said.

Mr. Seth Terkper told the media that following the bright economic indications, the government is forecasting a 4.5 percent growth in place of the original forecast of 3.5 percent. According to the Finance Minister, the World Bank is even more optimistic, forecasting a seven percentage growth.

Virtually beating his chest, Mr. Terkper said the government was determined to resist the temptation to overspend, in spite of the fact that 2016 is an election year. “We will resist the temptation of election year overspending,” he asserted.

The conflicting signal in this statement is epitomised by President John Dramani Mahama's statement earlier last month that his administration, through the Ministry of Chieftaincy Affairs, “is working around the clock to promote more chieftaincy divisions to paramountcy levels this year.”

The Head of State made this announcement when Mr. Samuel Syme, Deputy Upper Regional Minister, led a delegation of chiefs and people from the Builsa Traditional Council to the Jubilee House in Accra to present their newly enskinned King – His Eminence Nab Asakoug Azantilow – and to pledge their support to the Head of State to carry out his developement projects throughout the country.

Explaining why he would commit state funds for the exercise, President Mahama said apart from death and other calamities, there was the need to expand the scope to capture more chiefs to enable them participate in their houses of chiefs in the various regions to contribute their quota.

With hindsight of how governments have used the chieftaincy institutions and individual chiefs to garner votes in election years, the presidential pronouncement is a clear indication that the government would not stop at anything in throwing money into the chieftaincy institution this year, even though such expenditures would never have been captured in the budget.

In 2012, President Mahama's administration blew GH¢8.7 billion (more than US$5 billion at the time) over the budgeted expenditure in the three months leading to the vote. Suddenly, the Presidency and state officials discovered that Nananom needed four wheel-drives to attend to their traditional duties.

For me, as a social commentator, the economic difficulties that intensified throughout the nation owed their genesis to reckless spending to buy votes for the incumbent administration. The tragedy is that this nation appears to have learned nothing from that bitter experience.

I am sensing the danger that this so-called improvement in our economic fortunes, coming from the Minister of Finance, could be the source of a false safety net to prompt officials to go on another reckless spending spree, ostensibly to buy the vote on November 7.

I sense a lot of desperation in official pronouncements of late. It is as true as tomorrow is Thursday that officials would do anything if that would ensure them the vote.

Last week, when President John Dramani Mahama commissioned the Kwaobaah Nyanoa Community Secondary School, in the Eastern Region, the Head of State virtually went on his knees begging Ghanaians for a second term in office. According to the Head of State, the economy that he and his technocrats have virtually destroyed, would bounce back by next year and ensure that there is money in the average Ghanaian's pocket.

His argument is that the first four years in office has been spent improving on the social infrastructure of this country, and that these phantom development projects would form the foundation for Ghana's economic take off.

He asked Ghanaians to bear with the present challenges in the economy, because they are sacrifices necessary for Ghana's brighter future.

“Currently, in all the road construction that's going on in this country, a good percentage of contractors are Ghanaians, and not foreigners. And so by doing this, we are expanding the road construction industry and making Ghanaians take advantage of the commanding heights of that particular industry.”

The last time an administration captured the commanding heights of the economy, this country was reneging on its debt obligation, leading to near sanction from the international community. For those with a hindsight of history, that was during the Acheampong and his Yentua era.

Read the Presidential lips further: “In 2012, when I became President, only six foreign companies had asphalt plants to be able to do asphalt roads. Today, 22 Ghanaian companies have their own asphalt plants, and these are the gains that we are making in this country.”

Roads and other developments are good for the body politic. But they do not determine the entire quality of life of persons in the country, even though President Mahama appears to be a late convert to the provision of amenities as the necessary toll for development.

I am not a doomsday prophet. But anybody believing in President Mahama's ability to put money in people's pockets in the kind of economy of borrowing the Head of State is conducting might be amenable to every suggestion.

I dare state that anybody who trust in this administration's ability to improve the economic well-being of the Ghanaian, might well believe if he or she is told that the father was born a girl.

With the vote getting nearer, Ghanaian ears must be prepared to be assailed with all manner of claims, which brings me back to the Minister of Finance and the Mahamean Economic Theory and its Terkpernomics.

Like his boss, Mr. Terkper believes in the economy picking up by the middle of 2016 on the back of debt management under strict IMF guidance. According to the Minister, the reform programme seeks to boost growth and help cut poverty, by restoring macroeconomic stability through tighter fiscal discipline, strengthened public finances and slowing inflation.

“Lower inflation and interest rates,” said Mr. Terkper, “combined with a more stable exchange rate would help support private sector activity. Increased oil export and lower oil import on the back of domestic gas production will help improve the current account and support reserves over the medium term,”

The problem with the Minister's assessment is that none of his prescriptions is currently applicable to the kind of economy he is running. The local cedi continues to lose ground on its major competitors. When the cedi was handed over to the National Democratic Congress Mark II administration of the Mills/Mahama oligarchy, the cedi was virtually one on one with the dollar. Now one needs nearly four times the cedi to buy the same quantum of dollar the businessman was exchanging for in December 2008.

This means that the nation needs to export four times the same quantity of goods it was putting on the international market to import the equivalent quantity of goods it was bringing in from our foreign partners.

The tragedy is that our agricultural production has fallen into negative figures, meaning that our export commodities are under threat. To add to the problem, this government has made borrowing the cornerstone of its economic policy.

As you read this piece, Mr. Terkper is planning to raise a further GH¢6.03 billion. According to an official statement, the government expects to raise GH¢3 billion from 91-Day Treasury Bills, GH¢2.1 billion in 182 Treasury Bills, GH¢120 million from one year notes, and GH¢300 million from two-year notes.

The conventional wisdom is that an administration that raised the bar on borrowing from GH¢9.5 billion owed to internal and external creditors to nearly a GH¢100 billion within seven years, ought to be careful not to put the economic fortunes of the country in jeopardy, especially after the Finance Minister himself has admitted that the debt to GDP ratio has crossed the 72.5 percent mark.

Apparently, this administration believes in the notion that borrowing for future governments to take care of settling public debts makes economic sense. That is why the Mahama administration cannot deliver the panacea needed for growth and development. The GH¢51.2 billion recklessly doled out to Alfred Agbesi Woyome, 25 million Euros handed over to Waterville, and several other millions criminally given to other cronies, tell me that we are nowhere near economic salvation.

It is also obvious that the public mantra of the private sector being the engine of growth will remain a mere paper guarantee, at least, until the end of the Mahama regime.

At the time the Finance Minister was beating his chest about leading this country to the economic haven on the back of the Mahamean Economic Policy of borrowing with Terkpernomics, the President of the Association of Ghana Industries was bemoaning the future of private enterprises in this country.

Mr. James Asare-Adjei warned, at an encounter with the media in Accra, that the regime of multiplicity of taxes in Ghana was killing the industry. Businesses, he cried out, were already reeling under the harsh economic climate, and that the situation has been worsened by increases in utility tariffs, high interest rates, and the depreciation of the local currency.

Presenting a communiqué of the AGI after a conference of the major industry players in the country in Accra, Mr. Adjei said his organisation examined the general performance of the economy and expressed serious concern over the fact that industries were still bearing the brunt of a weak macro-economic situation, multiplicity of taxes, and high interest rates against the backdrop of high Bank of Ghana policy rates.

According to the AGI boss, many industries were relocating from this country as a result of high taxation, and a generally poor macro-economic situation.

I do not we need any ghost to explain why the major economic players are not happy. The economy is not responding to treatment. Mahama and his technocrats have failed to deliver.

I shall return!

Ebo Quansah in Accra