An Evaluation of Failed Economic Policies in Ghana

As the Global financial crisis picks up momentum, it's time to take a hard look at the performance of the Ghanaian national political leadership in meeting some of their most fundamental responsibilities. It's time to face the fact of serious failure over the last quarter century. We are not going to blame any political party, but we would try to be little objective in our discussion.

During the last decade, the leaders of both political parties and of major institutions such as the Bank of Ghana have presided over the abandonment of some of the most solemn obligations of constitutional government. They have done this in order to embrace an agenda favourable mainly to the financial, corporate, and government elites in the country.

In a radio broadcast in the 1980's, a full generation ago, Flight Lieutenant Jerry John Rawlings made a bold statement that the then Limann's government is not a solution to our country's problem, but the government is the problem. Rawlings was both right and wrong.

The problem Ghana was facing then was the collapse of the nation's manufacturing base through a recession that happened when Kwame Nkrumah was overthrown by a coup d' tat in 1966, the next government raised interest rates to over the twenty percent level which led to high rate of inflation in the country.

Rawlings's statement that "government is the problem" was correct to the extent that failed financial policies and the out-of-control actions of a Bank of Ghana beholden to private financial interests combined in the worse economic downturn since independence to wreck the one of Africa's greatest industrial powerhouse.

But he was wrong in thinking that the solution was privatisation of the economy based on advice from the World Bank, particularly deregulation of financial and investment institutions which took place during his two terms in the 4th Republic. The result was enormous growth in the power and influence of the seat of government and the big banks over the rest of the economy. The era of selling state properties, acquisition of wealth by greedy politicians was the predecessor of the disaster of today.

After Rawlings came President Kuffour. By the end of his term, the loss of manufacturing jobs had produced another recession. Ghanaians became poorer than before, the end result was the vote of no confidence in the New Patriotic Party by the electorates in 2008.

Now with the new President installed in Ghana, Atta Mills needs to cut the government budget enough by reducing Minister employment that would enable him achieve a budget surplus. This would lessen the drag on the economy from the national debt which Kuffour had left behind from his oversized government and his wealth build-up by his Party, leaving us in recession again.

We can only hope President Mills will succeed to some extent, because it would be heartless to wish disaster on the ones who suffer the most from the consequences of the greed and stupidity of people in power—namely the ordinary people who work for a living and who honestly try to raise their families and hold to a decent standard of living. But life is becoming very hard for the vast majority of Ghanaians who have been bearing the brunt of our failed economic and monetary policies of the last three decades.

Author: Paul Rex Danquah
PH.D Candidate
London