...by setting a strong socio-economic development agenda for Ghana in 2008? Kimberly Louis's (Ghana web 30/04/05) analysis on the impact of SAP on the Ghanaian economy was quite interesting. This writer who wrote a thesis on the “Socio-economic impact of HIV/AIDS in sub-Saharan Africa: The case of Ghana” looked at the SAP in Ghana and its impact on 1) Migration, Poverty and HIV/AIDS, Remittances and the diaspora, Women and Children, Health systems, Education and Agriculture and broadly agree with most of Kimberly's thesis. As Kimberly noted, at independence Ghana was deemed to be the only sub-Saharan African country with the potential to achieve rapid development. What Kimberly omitted or failed to add was the geo-political realities of the cold war and its dramatic impact on Dr Nkrumah's government. Unlike the Asian countries, in sub- Saharan Africa apart from mostly single railroad lines from the hinterland to the coast, the colonialists did not leave any meaningful physical infrastructure in place at independence. The only exception was the Union of South Africa. And the reason why the colonialists rule in South Africa went on much longer was the huge resources and favourable climatic conditions plus the huge investment in that country. The same investment situation can be found in almost all the Caribbean countries, which mainly relies on tourism to survive. Despite the military rule that was imposed on the country from 1966 to 1979 by thugs in uniform, Ghana is still the only country in the sub-region to escape civil war. Ex-President Rawlings set Ghana a momentous task of achieving middle income status in 2020. The government of John Kufuor and various stakeholders are all in agreement with this vision. Perhaps one greatest achievement of ex-President Rawlings was signing up to the Structural Adjustment programme of the Bretton Woods Institutions thus, saving Ghana from anarchy and instability, again a very important milestone that Kimberly did not acknowledged. Kimberly asserted that what is missing in Ghana now is leadership and the country's over reliance on Bretton Woods Institutions by delegating the responsibilities of the major economic decisions to unselected Bank/Fund officials in Washington, District of Colombia. This writer was among those who called on the NDC government to lift the subsidy on fuel to free resources for development before the Bank/Fund in 1998. There are new crop of dynamic and youthful leaders emerging, both within the current NPP government and in the main opposition parties of NDC and the CPP who now realise that salvation does not always lies with the Bretton Woods Institutions development policies. Together with their counter parts in diaspora, are formulating programs that would put emphasise on eradication of poverty, free access to education, health care and create the conditions for job creation. This writer will profile these emerging leaders from the 3 major parties in order of merit in a series of articles in the run up to the 2007 primaries to elect perspective candidates for the 2008 presidential elections. Although the policy differences between the ruling NPP and the 2 opposition parties of NDC and CPP are not that great, the leadership style of these 3 parties presidential candidates will determine who wins the mandate of the Ghanaian people in 2008. The “Miracle” years under Rawlings. In the mid 1980s Ghana, under the leadership of ex-President Rawlings became the first African country to adopt the Bretton Woods Institutions Structural Adjustment programes in its entirety and was subsequently haled as “Economic Miracle” and “ African Success story” by the major western countries and the International Financial Institutions. Thus setting the agenda for rapid development of an economy that was tethering on the brink of disaster. Before Rawlings became head of State in 1981 Ghana was theoretically bankrupt and was heading towards anarchy and disintegration.
This so called “economic turnaround” brought to the fore the essence of good economic management and exposed the faults of the NDC regime. It also gave the local press the opportunity to question the Human Rights record and corruption of the military/civilian junta under the then Chairman Rawlings.
Although the impact of the adjustment programme on the ordinary Ghanaians was negative with regard to employment generation and access to services such as education and health care however it also enable the Ghanaian government to set its priorities right in terms of developing strategies for growth, although this is debatable. What can not be denied was at a stroke Rawlings was able to linked into the Ghanaian economy the skill Diaspora community into the economic system and the subsequent rise in remittances into the country from this powerful group. Its uses have been questioned by many commentators, including the writer, who argue that this huge injections should go into social development. This writer identified areas as diverse as education, primary health, the military, the police and the numerous social service (“street children” roaming the streets across the country) as where the this resources should spent. Some might ask why the military and the police? Since the country became fully fledge democracy the Armed and the Police forces has performed with distinction yet their conditions of service, just like our teachers and lecturers, are so poor that it
Despite the methodology Rawlings (aided by the Bretton Woods Institutions) use to push the policy through, he saved the country from total anarchy and thus enable Ghanaians to start thinking about the development of their country more than what they can take out before the lights goes off. The political conditionalities that accompanied the donor assistance of the reforms gave Rawlings a further 2 terms mandate to see through the implementation under the guise of a civilian administration. However as has been acknowledged by many development economists and commentators Rawlings laid the foundation for Ghana's economic development, and for this alone that he will be remembered for his role in Ghana's development. The approach use in Ghana to push through the SAP was the same as the “ Chilean, Indonesian, Malaysian and the Philippines Miracles” with a strong dictator who was guided and protected by the Bretton Woods Institutions to lock into the international market of the MNCs of their respective economies.
In his analysis on the impact of the structural policies on the Ghanaian economy “ Structural Adjustment Programmes in Ghana : Interrogating PNDC's Implementation” West Africa Review (1999) ISSN: 1525-4488, Kwame Boafo-Arthur chart the history of IMF funded programmes in Ghana with governments from Nkrumah to Rawlings. He argue that what make Rawlings' successful implementation of the structural policies so unique was his close association with the Bretton Woods Institutions and the tacit support they gave him to see the programme through its conclusion. The hardships associated with the “successful” implementation of the policies was the introduction of user fees in education and health care delivery. Accompanying this success was massive corruption in every sphere of the economy under the watch of the NDC administration.
This Free Market project was hatched in the University of Chicago by a group of Latin American Economists who advocated widespread deregulation, privatisation and other policies for closely controlled economies mainly in Latin America. The Chicago Boys rose to fame as leaders of free market policies first initiated in Chile under General Augusto Pinochet and later spread across the globe under the leadership of the free World heroes at the period, late ex-president Ronald Reagan and Dame Margaret Thatcher.
The Chicago Boys mode of development was in sharp contrast to the one developed by the Dependency Theorists of ECLA (another famous group of Latin American Economists based at University of Chile, Santiago, including this writer's former lecturer at graduate school - Dr Robinson Rojas, and former Brazilian President Dr Fernando Henrique Cardoso, often referred to as Sociologist President. Ironically despite his socialist background President Cardoso implemented successful free market economic policies in Brazil during his presidency). Chile went from a backwater economy controlled by a dictator to an economic giant in the region. Chile's “success story” propelled her into the league of fast emerging economies and her GDP increased dramatically. Under just a decade, Santiago was transformed from a sleepy city into a bustling metropolitan capital city of Chile. Chile achieved per capita growth of 5% from 1985 to 1996.
In Ghana, Rawlings was aided by Ghanaian born technocrats working for the Bretton Woods Institutions and other International Financial institutions, majority of whom were educated in the elite Universities in United States and Europe, who this writer in his thesis on the SAPs years in Ghana coined the phrase for as “ The Ivy League Boys” just like their counterparts “ the Chicago Boys” two decades earlier….. “The Ivy League” economists were based at the Finance Ministry in Accra, in effect were the ones who were running the Ghanaian economy. Although the road to free market economy have been rocky for Ghana, the country had reversed her economic stagnation somewhat and has been enjoying massive injections from her skill nationals that she lost during the 1980s (known in the literature as “the lost decade”) and keep losing. This injection from the professionals into the Ghanaian economy is estimated to be approaching $3 billion dollar mark and increasing. This writer was among the first commentators who argue for the inclusion of the inflows from the Diaspora into Ghana's 5 -year development plans, and have question its uses in terms of social development. Rawlings last years in government was marked by nepotism, massive corruption and autocracy by his ministers and party functionaries who thought they were above the law. However as already stated what cannot be denied was Rawlings stabilised the rapid decline of the economy and laid the foundation for economic growth. Thus despite Rawlings sometimes unguarded comments, Ghana owes a lot to Rawlings for initiating the economic reforms in the late1980s and early 1990s, the so called “Miracle years” that took the country out of a basket case into a gateway for the West Africa sub-Region. Through Rawlings Ghana benefited from the imposition of the structural policies in Africa in terms of massive injection of aid which fuelled growth averaging 5% per annum during the 1990s( the miracle years). Ghana being an obedient pupil of the Bretton Woods Institutions under Rawlings, the Bank/Fund were able to railroad the SAP programmes across Africa.
The Transition years under Kufuor
After the euphoria making the beginning of his presidency, John Kufuor, an Oxford educated graduate and a seasoned politician/businessman adopted a claim approach to governance. The first thing that he did was to acknowledge the immense contributions that Ghanaians in diaspora make to the economy. He started off with his “Home Coming” summit aimed mainly at skill Ghanaians in Diaspora to go home and help with the building of their homeland. The message Kufuor delivered at the summit encourage a whole generation of Ghanaians to head home to help with the reconstruction of their homeland.
The Kufuor first term saw the establishment of the National Reconciliation Commission based on the South African reconciliation commission to right the wrongs of the Rawlings regime. Although some commentators have argue that this was a witch hunt exercise and that most of the recommendations, if and when implemented, would be over turn by the next NDC government makes mockery of the NRC. On the economic front the NPP government has initiated reforms that if carried to the letter will make things a bit better for the masses.
Ghana's economy is based on subsistence agriculture and the country is heavily indebted, with aid forming about 60% of its GDP. Her per capita income is $350/400 per annum. The small infrastructural base and assembly industries that lie derelict across the country were built during the Nkrumah regime in the 1960s. With Ghana's low level income domestic saving is negligible. Despite the slow progress that Ghana is making, she still depends on foreign aid, just like the rest of sub-Saharan Africa, for sheer survival. Unemployment, underemployment, poverty and illiteracy are wide spread with over 50% of the population living under less than $1 per day. However since the early 1990s Ghana has turn from a basket case into an economy that is showing all the signs of becoming a beacon of hope for the sub-region and has been touted as the gateway to the sub-region, albeit with good justification. The instabilities in the countries surrounding her show why investors and multinationals are using Ghana as their base to try and venture into neighbouring countries why the law of the jungle rules.
Since 2000, the Kufuor administration is gradually building human capital and physical infrastructures for development with a sector minister dedicated to the improvement of Ghana's capital, Accra. Kufuor has adopted export-based strategy, with active promotion of Small Medium Enterprises as the yardstick for this growth. The administration is also gradually reforming the land system to make it easier for cash and food crop farmers access finance and modern agricultural machinery. In this respect, the nation's 4 top Polytechnics are being upgraded to enable them train highly skill artisans and engineers to compliment students from Kwame Nkrumah University of Science and Technology and University of Development Studies in Ghana's quest for take off..
To ensure that he strengthens the foundation built by ex-President Rawlings, President Kufuor in his second term has doubled up the number of his junior ministerial team to make sure that every sector is covered. Although he has been unfairly criticise for the number of ministers he has assemble, the President acknowledges the huge tasks ahead of the country, thus making sure that nothing is left unturned for the take off.
This essay will examine some of the hurdles that Ghana must overcome if it is to make a turn around. Kufuor is putting in place all the necessary policies that would aid his successor for a smooth take off in 2008. And one person who is fast emerging to lead the NPP at the 2008 elections is Papa Owusu Ankomah. Can Papa set a strong socio-economic agenda for development?
It is true that poverty in Ghana has deepened since the inception of the SAPs. The country's poor are getting poorer and most school children are forced to leave school to fend for themselves. Although most traditional rulers are increasingly taking on the role of social providers, this writer and other commentators has urged the government to use the huge inflows from the diaspora community to develop social infrastructure, give some of the inflows as soft loans to SMEs in order to enable them create jobs for the jobless graduates who migrate with their skills to other countries, thus Ghana becoming the eventual loser. Brain drain is having a dramatic impact on the economy. Every 5 medical and engineering students that graduate from Ghanaian universities, 4 migrate to the developed countries of the West. Ghanaian doctors, nurses and engineers, perhaps the best trained professionals in the whole of sub-Saharan Africa, can be found in all the major hospitals and institutions in Western Europe and North America. This is a great worry to the government and other stakeholders. Ghana was the only country that lost most of her professionals during the 1980s (known in the literature as the “lost decade”) and still losing them.
Although Rawlings was able to link these “lost professionals” into the Ghanaian economy through liberalisation of the financial sector under the SAPs programmes, it is looking increasingly likely after the transitional years of President Kufuor, that Papa Owusu Ankomah's (that is if he wins the presidency in 2008) agenda for socio-economic development would defer sharply from Rawlings and Kufuor administrations. Papa would put social development, encompassing poverty eradication (a policy which close to President Kufuor's heart), free primary education/gender equality, primary health care and job creation at the fore of his policies. Papa Owusu Ankomah who comes from the liberal wing of the NPP knows that by creating the conditions for job creation that Ghana can truly become a beacon of hope for her numerous citizens who are jobless. Papa's stand on poverty eradication is exemplarily. He has acknowledged that all children in Ghana should have access to primary education and he is fast emerging as the champion of the decency and hard working families. Papa share the same vision as the President and past leaders, including ex-President Rawlings, Dr Nkrumah, Dr Danquah and Dr Kofi Busia.
Views expressed by the author(s) do not necessarily reflect those of GhanaHomePage.