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Is the Economic Situation in Ghana Gloomy or Rosy? Economic Expectations of Consumer-voters in the Northern Region

By Anas Sulemana
Article Is the Economic Situation in Ghana Gloomy or Rosy? Economic Expectations of Consumer-voters in the Northern Region
APR 27, 2022 LISTEN

Introduction

This study sought to gauge the direction of consumer-voter economic sentiments in Northern Ghana. The work did not investigate HOW and WHY these consumer-voters think the way they do about the performance of the economy. Our primary objective was to find out WHAT their expectations are of the performance of the national economy in 2022.

The work was motivated by events in the last quarter of 2021. The events include but are not limited to the rejection and subsequent approval of the budget, the myth of economic shutdown, the E-levy, the IMF debate, the size of the nation’s debt, and debt servicing issues. These were issues the media highlighted.

To give our work a simple conceptual structure we defined consumer-voter expectations using OPTIMISM AND PESSIMISM. Positive expectation denotes optimism which means people think that things will be better in future. Conversely, negative expectation denotes pessimism which means people are feeling that things will be worse in future.

We argue that optimism suggests that people have confidence in the abilities of managers of the economy to fix current and future economic problems. Pessimism means people have lost faith in the managers of the economy. They think the economy is in bad hands and so things will get worse. Our arguments are consistent with the assumptions and opinions of leading political-economic scholars such as James Allen Stimson and Paul Kellstedt.

Methodology

The strength of this study is in our choice of the research setting and the size of our study sample.

We targeted “market days” for the data collection. Aside from their socioeconomic significance, the days present populations that are rich in demographic diversity. More importantly, the market places would allow us to interact with the economic actors in action and since the study was about economic expectations there could not have been a better setting. The study had 1845 as its sample.

Nine (9) major district “market days” in the Northern Region were targeted in January 2022. The Northern region was selected because it has evolved from being an NDC stronghold to a level where it has become a major battleground. Both parties have nine parliamentary seats each. Our criteria for subject selection were based primarily on availability, willingness, and readiness to participate in the study. Our team on the field had no control or influence over these factors. There is no reason to impugn any form of bias in the way the respondents were approached and interviewed. Also, research scholars have argued that when the sample size is high (1845) the results of the study are protected from the influences of random error.

In this study, One thousand eight hundred and forty-five (1845) people were asked:

  1. What do you think the state of Ghana’s economy will be in 2022? The response options were:
  • The national economy will be better
  • The national economy will be worse
  • The national economy will stay the same

Sixty-three percent (63%) of citizens in the study say the national economy will get worse in 2022. We note that majority of consumer voters in our study are pessimistic about the economy.

We then decided to analyze partisanship and economic expectations.

What we found was that fifty-four (54%) of respondents in the study who support the party in government say the national economy will be worse in 2022

We find this strange because what the political economics literature says is that partisan supporters of a government will normally view the performance of their party favorably.

What we have discovered is Political Economic Reality Effect (PERE) where partisan supporters (based on their evaluation of local economic/political situation) present positions on the national economic situation that significantly differ from those of party elites.

Citizens` confidence in the future of the economy is dependent on the confidence they have in the country’s political leadership (De Boef & Kellstedt, 2004). Whiles the managers of the economy want us to believe the nation is in good hands and so things will be rosy, citizens (even partisan supporters) disagree and think that the situation is gloomy.

Conclusions and policy implications

  1. Our work showed that pessimism is endemic across all nine district markets. Interestingly, 6 out of the 9 district markets days are in NPP constituencies. This situation represents a major challenge for the government. Citizens in government-held constituencies think that things will be worse in 2022.
  2. Partisan supporters appear to be losing confidence in the ability of their leaders to deal with the challenges the nation is facing. Within party confidence crisis has implications for the government because that can lead to voter apathy in future elections.
  3. Women (68%), unemployed (74%) and peasants (68%) in our study think the national economy will be worse in 2022. The implication is that the vulnerable in the districts in our study do not have faith in the ability of the government to improve their living conditions in 2022.
  4. Confidence judgments about the national economy are relevant in a multiparty democracy not only because they indicate what Ghanaians think about the personal abilities of the managers of the economy but they can also influence future electoral choices of citizens.
  5. The consumer-voter has become more rational and can distinguish between rhetoric and delivery. What we find is that people reflect on their real socioeconomic situations and that guides their expectations. Beyond partisanship, citizens have become more discerning.
  6. Governments need to understand that they cannot persistently delude ordinary citizens. Reckless, profligate government policies may just shatter a government’s credibility and suppress consumer-voter confidence as opposed to stimulate it.
  7. The political elite must stop the unfulfillable promises because that is hurting voter confidence and damaging the legitimacy of politics and democracy.

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