WHY ARE NDC AND NPP ECONOMIC POLICIES SIMILAR?
By Lord Adusei
Many ordinary Ghanaians, Ghana-watchers, and experts continue to wonder why politics since 1992 has failed to offer answers to pressing socio-economic problems such as unemployment, underdeveloped natural resources, economic underdevelopment, infrastructure deficit, institutional weaknesses, economic deprivation, poor access to health, education, water, food, electricity, and tepid fight against corruption. On 4 January 2018, Ghana Immigration Service decided to recruit 500 workers. More than 84,000 people applied for that limited position. Why is unemployment so severe in the country?
In this short essay, we answer part of the question by first pointing out that both the NPP and NDC have subscribed to the same neoliberal economic dogma that swept across much of developing world particularly in Africa but which has offered little solution to Ghana’s economic problems. To answer why both parties have implemented similar economic practices, We focus on the academic and job background of the elites in both parties who usually steer Ghana’s economic affairs. We argue that economic policies of the NPP and NDC are similar because leading figures of both parties have received their education in the same liberal academic institutions in Europe and America and that the similarity in knowledge they have received explain why they also formulate almost the same economic policies. I also argue that the NDC and NPP economic policies are the same because the elite economists and experts in both parties who usually design, adopt and implement Ghana’s economic policies have worked with the same liberal organisations and this has influenced their economic policies. The paper does not argue that attending foreign universities or working for liberal or financial organisations is bad, what it intends to show is that economic policies of NPP and NDC do not differ because of the academic and job history of those entrusted with managing Ghana’s economy.
Leaders matter in statecraft. Leaders define and shape current and future policies that affect the current and future performance of the economy and hence issues such as economic growth, inflation, economic security, industrialisation, employment, taxation, income and wealth. However, leaders are influenced by the schools they attend, and the knowledge offered by these schools. They are also influenced by the places they work and organisations they work for: the knowledge, experience, practices and culture at the job place. Leaders are also influenced by the people and organisations they associate with, as well as the books, journal articles, magazines and other materials they read.
Politics in Ghana since 1992 has been dominated by two political parties: the National Democratic Congress (NDC) and the New Patriotic Party (NPP). While the NPP and NDC differ strongly on political leanings (NPP is centre right, NDC is center left) both are the same in economic thinking, economic policies and economic practices. Both the NPP and NDC subscribe to the same neoliberal economic dogma and a socially liberal cultural agenda.
What is neoliberalism?
According to David Harvey, “Neoliberalism is in the first instance a theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterised by strong private property rights, free markets and free trade. The role of the state is to create and preserve an institutional framework appropriate to such practices. The state has to guarantee, for example, the quality and integrity of money. It must also set up those military, defence, police and legal structures and functions required to secure private property rights and to guarantee, by force if need be, the proper functioning of markets. Furthermore, if markets do not exist (in areas such as land, water, education, health care, social security, or environmental pollution) then they must be created, by state action if necessary. But beyond these tasks the state should not venture. State interventions in markets (once created) must be kept to a bare minimum because, according to the theory, the state cannot possibly possess enough information to second-guess market signals (prices) and because powerful interest groups will inevitably distort and bias state interventions (particularly in democracies) for their own benefit” (Harvey 2005:2).
When we say both parties subscribe to neoliberal economic dogma we mean the fact that both parties have policies that advocate for less severe state regulations and intervention on the economy, and greater emphasis on stability in economic policy, market mechanism rather than “Keynesian” goals such as full employment and the alleviation of abject poverty. One of the first acts of the Kuffour’s government was to increase petrol prices by 60%. Both parties favour neoliberal policies such as subsidy removal, deregulation, privatisation, and tax cuts. Kuffour’s government privatised Ghana Telecom. The NDC government of Rawlings privatised Ashanti Goldfields, and GIHOC industries, while the NDC government of John Mahama also sold Merchant Bank. Both parties share a radical commitment to laissez-faire economic policies. They have placed emphasis on the market as way of solving Ghana’s underdevelopment problem. The governments of both parties have given up their ability to control the economy for the good of society as a whole, or the interests of Ghanaians. Both parties share a strong preference for a state which reserves for itself the right to intervene in the market only in order to preserve the market economy (Thorsen and Amund, 2006).
This similarity in neoliberal economic thinking is so partly because of the academic, training, and work background of elites of the two parties who are given the mandate to steer Ghana’s economy. As managers of Ghana’s economy, their neoliberal economic bias has prevented them from implementing alternative/radical economic policies that have been so crucial in countries such as China, Singapore, Malaysia, Taiwan and South Korea.
Finance Ministers and Economists of NDC and NPP
Dr. Kwesi Botchwey (a product of Yale University and University of Michigan) was Ghana's Minister of Finance from 1982 to 1995 and under his economic leadership implemented the most sweeping economic reform in Ghana’s history. He is credited for bringing economic stability in Ghana and also for pushing the country deeply into the neoliberal economic orbit of the International Monetary Fund (IMF) and the World Bank. He had worked as lecturer in several liberal universities in the United States including Tufts University, Harvard University and Columbia University. He has consulted for the World Bank and the United Nations Development Programme (UNDP).
His successor, Mr. Richard Kwame Peprah (who was finance minister from 1995 to 2001) continued the neoliberal policies of Dr. Botchwey. It was under Mr Peprah’s leadership that most of Ghana’s state-owned assets were sold. Other NDC economists who have worked as finance minsters such as Mr. Seth Tekper, and Dr. Kwabena Duffour were trained in liberal universities in the United States. Mr Tekper for instance is an alumni of Harvard where he obtained a Masters of Business Administration degree. Mr. Tekper worked for the International Monetary Fund (IMF) the sister neoliberal financial institution of the World Bank. He also consulted for Harvard Institute for International Development (HIID), and the Harvard International Tax Program. Dr. Kwabena Duffour is a trained economist from Syracuse University, USA. He obtained both his Masters and Doctorate degrees from the same university. As Governor of Bank Of Ghana, his monetary policies were similar to his predecessors. Although Mr.Paa Kwesi Amissah Arthur (former Governor of Bank of Ghana and former Vice President) does not have the foreign academic credentials of his contemporaries, he worked as a consultant for the World Bank in The Gambia and continued in the monetary tradition of Dr. Kwabena Duffour.
Like their NDC counterparts, NPP’s leading economists were trained in liberal academic institutions in Europe and North America. For example Dr. Mahamadu Bawumia (Vice President and a former Deputy Governor Bank of Ghana), attended University of Buckingham and Oxford University in UK and Simon Fraser University, Canada. He worked as an economist for the International Monetary Fund and for Bank of Ghana. He has also taught in several universities including Baylor University, Texas, USA and Emile Woolf College of Accountancy, London, UK. The institutions he attended are a hub of the main economic ideology that has dominated economic policy-making in the 40 years.
Mr. Kenneth Ofori-Atta (Finance Minister) is an alumni of Yale University and Columbia University. He too has worked in the banking industry for a long time. Ofori-Atta for instance has worked for Trust Bank Ltd of The Gambia and International Bank of Liberia. He is also co-founder of Data Bank. Yale and Columbia are two of the liberal institutions in the world whose teaching methods are similar to Oxford.
A third economist in the NPP with the same liberal background is Yaw Osafo Marfo (former Finance Minister in the Kuffour government and currently Senior Minster). As Finance Minister, Mr. Marfo pursued neoliberal economic policies similar to those pursued by his predecessors in the NDC i.e. Dr. Kwesi Botchwey and Mr Richard Kwame Peprah. Privatisation policies of the NDC continued under his watch. After the NPP lost power to the NDC in 2008, Mr. Marfo did consultancy work in Liberia for the World Bank, an organisation which has become the vehicle for neoliberal economic policies globally. He has also consulted for African Development Bank, and the UNDP.
Apart from the ministers and economic advisors the presidents such as Agyekum Kuffour, Atta-Mills, and Akuffo Addo also attended the liberal universities in Europe. Kuffour for instance attended Oxford. Mills was a graduate of London School of Economics and School of Oriental and African Studies also in London, UK. He taught at Temple University, USA; Leiden University-Netherlands, and University of British Columbia, Canada. Nana Akuffo Addo is a product of Oxford, and John Mahama studied at the Institute of Social Sciences in Moscow, Russia.
The similar academic and job background of the presidents of both parties and particularly their key ministers explains why economic policies of NDC and NPP are the same despite their different political orientations. Both parties economic policies are also similar because their policies tend to be written with heavy inputs from the World Bank and the IMF. The United States and Britain that have heavily subscribed to neoliberal economic policies also advocate for economic solutions similar to theirs when NPP and NDC leaders consult them.
Harvey, David (2005): A Brief History of Neoliberalism. Oxford: Oxford University Press.
Thorsen, Dag Einar and Amund Lie, Amund (2006) ‘What is Neoliberalism?’
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