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13.12.2008 Feature Article

The untold story of NPP

The untold story of NPP
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An inadequate attention to the micro-economy contributed in no small measure to the ill fortunes of the ruling New Patriotic Party (NPP) in the current national elections.

Analysts believe measures to address the peculiar needs of the indigenous micro, small and medium enterprises were late in coming, in the eight-year NPP administration, and when they came, were rather haphazard than well-planned.

The Ghanaian polls are viewed as a test for African democracy after flawed elections elsewhere on the continent. Analysts say the contest is especially keen as the gold and cocoa-exporting nation, seen by investors as one of Africa's most promising emerging markets, looks forward to greater prosperity when offshore oil comes on stream in late 2010.

Voting trends along the coastal belt seem to corroborate the assertion that the poor management of premix fuel supplies to the indigenous fishing industry, as well as the inappropriate treatment of the matter of pair trawling by foreign vessels, which greatly undermined the local industry, significantly impacted the outcome.

The Kufuor Administration's focus on the macroeconomic sector, undoubtedly, resulted in significant gains. Debt to GDP ratio declined from 189 percent in 2000 to 48 percent by the close of December 2007, the underlying factor being the growth of GDP from $3.94 billion in 2000 to $14.05 billion in 2007, though the country's debt stock was approximately US$7.3 billion for the two periods.

GDP growth rate rose from 3.7 percent in 2000 to over 6.3 percent in 2007, while inflation rates dropped from40.5 percent to just above 15 percent currently.

Ghana's international reserves stood at US$33.4 million, equivalent to only eight weeks of import cover in 2000, but now stands at US2.9 billion, equivalent to 2.7 months of import cover.

Most local industries however, cited competition from cheap foreign imports as greatly threatening their survival in addition to other challenges such as lack of adequate and inexpensive credit. Studies have established that the degree of state protection for local industries was grossly inadequate, compared to the protection enjoyed by foreign competitors in their home countries.

Complaints from the general public have consistently been that such macroeconomic gains also do not reflect in their living conditions, irrespective of the daily minimum wage rising, in dollar terms, from $0.6 in 2000 to almost $3,00 currently.

World Bank/International Finance Corporation report 2008 on world development shows a tremendous decline in poverty rates in the country from 52 percent in 2000 to 28. percent currently, stating that Ghana is on course to exceed the 2015 MDG of halving income poverty.

Nevertheless, pockets of abject poverty exists in urban areas with the rate rising in the Greater Accra Region as a result of increased rural urban migration that is estimated to increase the city's population by over 350,000 people annually. That may also have contributed to massive swing against the ruling party in the region.

The government put a number of interventions in place to mitigate poverty, including the Livelihood Empowerment Against Poverty Programme (LEAP), meant to complement the government's poverty alleviation strategy by providing the equivalent of US$8 to $15 cash every two months per household to the poor, the disabled, and senior citizens aged 65 and years and above who have no livelihood support.

That certainly does not seem to have translated into grassroots support for the government since the Central and Northern Regions as well as other areas where the project started, did not positively impact the party's political fortunes.

The National Health Insurance Scheme and the 40 million pounds programmes that provide both antenatal and post-natal care for women have brought significant relief in health care delivery to most people in the poverty bracket. Without any significant improvement in health delivery infrastructure, most people still seek healthcare outside the designated hospitals and clinics.

Analysts are concluding that most of the poor value cash in their hands, which gives them liberty over their spending pattern, rather than social services that they are unable to quantify.

B&FT, © 2008

The author has 3 publications published on Modern Ghana.Column: BFT

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