STATEMENT: CPP on the state of the Ghanaian economy

Introduction

I am pleased to present the first in the series of “What the CPP Will Do”. By our political tradition, we keep our promises. What the CPP is doing today is delivering on the promise made by the Chairman of our Party, Mr. Ladi Nylander just yesterday on the occasion of the celebration of the 101 birthday anniversary of the Founder of our political tradition, that we will begin to offer to the Ghanaian public alternative policies based on our core values. The implementation of our core values will lead to the transformation of our society. I will address the subject of what the CPP will do about the Ghanaian Economy.

As we sit here today, the NDC Administration led by President John Atta Mills has not been able to provide the country with plan for managing the economy over the four year term of office and beyond. We do not have the blueprint for the “Better Ghana” the President and the NDC keep referring to. On the other hand, we can say that prior to 1966, the CPP had a blueprint for the future progress and development of Ghana as a nation. It was “…a programme of social and economic development based on the use of science and technology to revolutionalize our agriculture and industry.” It held a promise of a brighter future based on prosperity for all Ghanaians, a prosperity that was in part realized until it was abruptly truncated.

Today, the world has changed. The fortunes of many nations in Europe, the Americas and Asia have changed significantly. Unfortunately, our problems remain largely the same as they were forty years ago. Consequently, the goal of the CPP has not been fulfilled. Ghana remains pre-industrial, raw material export-based and dependent on development assistance. We have an economy that is over-reliant on the importation of most of what we use, eat and wear. Our budget including major initiatives such as our national census, school feeding programme and even our elections are dependent on funding from international development agencies. Whatever middle class we have are mostly agents of foreign enterprises, importers and traders of imported goods. Our problems have remained largely the same because those who have had the opportunity to administer the affairs of Ghana in recent years, have not shared our belief in the CPP core values and hence have been incapable of implementing them.

As Ghanaians remain in need of the basics of life, our goal as a Party remains as follows:

“…to establish in Ghana a strong and progressive society in which no one will have any anxiety about the basic means of life, about work, food and shelter; where poverty and illiteracy no longer exist and disease is brought under control; and where our educational facilities provide all the children with the best possibilities for the development of their potentialities.”

This goal inspired the CPP Cabinet in the First Republic to work with a sense of urgency. It still provides us with enough motivation to move our country through a path that is very different from that which the NDC and the NPP have offered so far in the Fourth Republic. Advances in science and technology bring in their wake new abilities to bridge geographical and developmental gaps. What the CPP will do is use these advances to bring about social transformation, fairness, justice and increased prosperity for all our people.

Bringing the Economy Back Home

The Convention People’s Party’s objective is to “bring the economy back home”. This unique signature is captured in the official manifestos of the Party since 2004. The objective is consistent with the Party’s principle of self determination. It means that the CPP’s economic policy will be felt and as a result, known in every village, town and municipality in all corners of our country. Our economic objective is different from what has been offered by NDC 1 & 2 and NPP 1 Administrations. In practical terms it means that the CPP will take an aggressive posture to wean the economy away from the IMF, the World Bank and other international finance institutions. It means that the CPP will not mortgage the future of our children and our natural resources to our detriment and the benefit of other nations as we believe the STX Korea agreement and existing oil and gas agreements will do.

It means that the CPP will not sell the Agricultural Development Bank or the Ghana Railways Company but will rather develop and modernize them to serve the national interest. It means that we will bring back to life the Jute factory to provide the essential sacks to carry the cocoa we produce not only to factories abroad but to our own indigenous value-adding processing plants at home. It means that we will re-design agreements for the exploration of natural resources such as gold, diamond, bauxite and oil and gas to ensure that Ghanaian entrepreneurs, investors, professionals and workers become the main players and the people of Ghana the main beneficiaries. It means that we will achieve this by changing the laws that govern our extractive industries to allow Ghanaians full participation through financial and technical support to local companies. It also means that we will use the right of the state to tax to discourage unbridled importation of everything under the earth and use the revenues to promote the development of our own enterprises.

The Finance & Economic Planning Ministry under a CPP Administration will launch in January 2013, an aggressive crusade to buy locally produced goods and services. The CPP believes that the State matters and that the State has an important role to play in the economy. We believe that it is the job of government to prepare its people and give them the necessary opportunities to overcome inexperience and inadequate capital. This is what the CPP will do.

Quite often reference is made to the progress made by some of the countries who were at par or behind Ghana in terms of per capita income at the time of our independence on 6th March 1957. Specific reference is made to Singapore, Malaysia and South Korea in suggesting that comparatively, Ghana has not lived up to expectations. Many of the analysts or commentators fail to appreciate the positive role played by the State in Singapore, South Korea and Malaysia to directly assist their private sectors to grow and prosper. It must be stated that when these countries were off and running in the 1970s and 1980s, Ghana was labouring under the weight of military intervention. Too often, the NDC and the NPP people repeat “…the private sector is the engine of growth” and leave the domestic private sector alone to fend for itself. The CPP will not make this same mistake.

What the CPP will do is inject a heavy dose of the state’s participation to support domestic industries and job creation. We will act with a sense of urgency to “stimulate” the development and growth of domestic industries, the type that creates well-paying jobs that will put real money in the pockets of Ghanaian men and women.

Assumptions for a CPP Budget

A CPP budget will give priority funding for the achievement of social justice. This means that social welfare, employment, environment, preventive health programs, crime prevention and education will be favoured. Substantial budgetary support for science and technology will be provided to ensure that we have the necessary human capital to compete in the new global environment and meet the needs of industry.

A CPP budget will mandate the use of the purchasing power of the State to ensure that we maximize the potential of local industries in all areas – agriculture, technology, consumer goods etc. We have people with direct experience in job creation and industrial development in Ghana and abroad. Unlike other the NDC and the NPP, we have an enduring CPP tradition of job creation. We are prepared to use appropriately the private sector, cooperatives, joint ventures with foreign investors and strategic state participation to bring “Work and Happiness” to our people at home. The CPP will lead in a way that will make this crusade national and enable it to gain a solid foundation. We will work diligently to find ways to enable local producers to find their feet in the market, to walk and then run. Where the private sector is unable or unwilling to supply capital in an area of strategic importance to our nation, public funds will be provided to finance new industries independently or in partnership with the private sector.

The Budgets of the NDC

It is important now to compare what the CPP will do with what the current NDC Administration has been doing with regard to budgeting for the Ghanaian economy.

With firm signals of uncertainty and lack of confidence, the NDC Administration’s Minister of Finance & Economic Planning introduced the 2010 budget to Parliament in a way that told Ghanaians that the road to the so-called “Better Ghana” has many curves, potholes and roadblocks.

That budget aimed to reduce the estimated end of year 2008 budget deficit of 14.5% of GDP to 9.4% of GDP at the end of 2009. To achieve this, a program of economic stabilization and fiscal control was initiated. The program was as the NDC’s Minister of Finance & Economic Planning said, to “…reduce the current budget deficit to sustainable levels, improve the exchange rate regime, and work towards the attainment of single digit inflation.” The NDC chose to improve numbers by playing the statistics game. The CPP chooses to improve the human condition by investing in what will provide opportunity for a better life at home – social welfare, a conducive, healthy environment, employment, a good education based on science and technology, etc.

According to economic and financial experts in Ghana, it is clear that 2009 brought in its stride stagnation in economic activity and a high cost of money. Many banks deliberately slowed down lending. Money was made scarce and so became very expensive. The Mills Administration in 2009 led us back firmly into debt and into the iron-clad grips of the World Bank and the IMF and their growth-suffocating conditions – conditions we have been unable to meet resulting in the slowing down of disbursements. It has been reported that over 2 billion US dollars were committed by these institutions to support the Ghanaian economy in exchange for the implementation of stabilization measures including freezing public sector employment and a further liberalization of pricing in the crucial energy sector. Also worrisome is that fact that the Economic Governance & Poverty Reduction Credit from the World Bank was designed to “… serve as a partial bridge to the onset of oil production”. This can only mean that we have started to spend oil revenues even when as a country, we have not agreed on the use of petrol dollars. The “conditions” for disbursements from this facility are virtually the same or similar to the ones attached to facilities granted to previous NDC 1 and NPP 1 Administrations. Nothing has changed. What the CPP will do is work selflessly to harness our own resources for development.

For 2010, the NDC’s Minister of Finance & Economic Planning presented a “business as usual” policy orientation that included the usual NDC-NPP blame game. The repeated emphasis on comparing arrears and problems left by the NDC1 administration in 2000 and the NPP administration in 2008 rather than focusing on results achieved or inherited problems solved was a clear indication that the 2010 budget would not produce any serious, challenging targets.

The 2010 budget continues the policy of achieving macroeconomic stability and fiscal consolidation at the expense of real growth that would encourage job creation and rise in the standard of living of Ghanaians. The 2010 budget did not carry with it the policy intentions that will make it possible for our companies to gain easier access to credit, obtain lower cost funds and create more jobs in the country. The NDC’s priority spending areas for 2010 are: Oil & Gas, Modernisation of Agriculture, Private Sector Development, Key Infrastructure Development and Information and Technology Development. No new strategies were presented by the NDC’s Minister of Finance & Economic Planning to show how we will get there. Much was said about stabilization, expenditure controls and arrears payment – what made the economy stagnate in 2009 - but very little about growth.

Given that the prospects are that the Mills Administration missed its 2009 GDP growth target of 5.9% with an actual of about 4.7%, it is difficult to determine how we will reach a growth target of 6.5% in 2010. Without growth, the dream of a middle income country in a “Better Ghana” will not be achieved during the four year tenure of the Mills-led NDC Administration. To reduce poverty significantly and become a middle-income country, it is agreed by many that the Ghanaian economy must grow in the 8-10% range. The management of the economy by relying on inflation targeting, slowing government expenditure while liberalizing trade will not get us there.

The 2010 Economic Outlook Macro-economic indicators captured within the last six months of the year indicate that the Ghanaian economy is doing what it was designed to achieve – stability, low growth, decreased spending by government in order to lower inflation.

According to the revised provisional GDP of 4.1 percent released by the Ghana Statistical Services the economy grew by 4.1% in 2009 and the effects of this are still being felt in 2010. By all indications, the Ghanaian economy will grow below the 8 % rate needed to begin a climb into the ranks of the middle income countries. We will not see the beginning of a “Better Ghana” this year. Lower inflation figures are consistent with reduced consumer spending in the system. The records show lower collections of import duties and import VAT, CEPS collections were below target. The structure of the Ghanaian economy will remain the same – producer of raw materials for export, dependent on foreign financial assistance. Ghana will continue to be a debtor nation. Unemployment will be high and wages low. Clearly, Ghana needs change for the better and the CPP’s core values are what the country needs.

The CPP Vision for Ghana The CPP vision for Ghana in one generation is to be a high income country, in a society that is just, safe, caring, united and prosperous. To achieve this, will require a SOCIAL TRANSFORMATION. This means transforming our country to become a society that is patriotic, disciplined, self reliant and pursues excellence as a national character, a society that is fair for all and where democratic and economic governance is devolved to the local level. As an integral part, the CPP will actively seek the political and economic unity of Africa to establish the continent’s position in global affairs. We stand differently from the other political parties. Ours is the only political party that believes that the unity of African States will provide a better market, more opportunities and prosperity for our people at home.

Our single-minded purpose is to use innovations in science and technology to revolutionize our way of life, create employment and significantly improve the standard of living of all of our people. This means that education infrastructure and curriculum from kindergarten to the tertiary level will be provide the science and technology foundation needed by every boy and girl in our society to function effectively in the modern world. This means that the public service will be given all the modern technology tools to function efficiently to support the public and private sectors adequately.

It means that the Ministry of Finance & Economic Planning itself will lead the technology revolution by implementing world class finance and accounting solutions, establishing paper-less offices, digitizing documents to make them instantly available, being transparent and eliminating corruption. In this regard the Ministry of Finance & Economic Planning under a CPP Administration will provide the funds to implement advanced technology tools at our ports and harbours and in our revenue collection agencies to prevent fraud, corrupt practices and enhance government revenue.

This also means that our research institutions such as CSIR and the Noguchi Memorial Institute for Medical Research will be highly resourced to deliver practical solutions to the market and in collaboration with the private sector. Finally, it means that the CPP Administration that comes to power in January 2013 will re-engineer the budget to provide financial and technical support to Ghanaian industries so that a petro-chemicals industry can rapidly thrive and develop in addition to modern machine shops and factories that rely on aluminium and other locally-available natural resources and agricultural raw materials. For the avoidance of doubt, we are radically aiming to bring the economy back home in a manner that will be felt in Ghanaian pockets.

Another differentiating element in how the CPP will manage the Ghanaian economy is the matter of accountability and implementation. Chapter Six of the 1992 Constitution: The Directive Principles of State Policy together represent our collective broad national agenda for what the Constitution says is the “...establishment of a just and free society.” A CPP Administration will live by these broad principles and the Constitution’s requirement for monitoring and evaluation, so that our nation can experience significant growth and development. Article 34 (2) directs that:

“The President shall report to Parliament at least once a year all the steps taken to ensure the realisation of the policy objectives contained in this Chapter; and, in particular, the realisation of basic human rights, a healthy economy, the right to work, the right to good health care and the right to education.”

A CPP President will live by these principles and ensure accountability. No other political party in this country has embedded these principles in its policies and programmes. The CPP once again, will be a pioneer in bringing something new, different and positive to our people.

Conclusion The CPP vision for Ghana in one generation is to be a high income country, in a society that is just, safe, caring, united and prosperous. To achieve this, will require a SOCIAL TRANSFORMATION, one that turns Ghana into a society that is patriotic, disciplined, self reliant and one that pursues excellence. The Convention People’s Party’s objective is to “bring the economy back home”. To make this happen, a CPP budget will mandate the use of the purchasing power of the State to ensure that we maximize the potential of local industries in all areas – agriculture, technology, consumer goods etc. The objective is consistent with the Party’s principle of self determination.

A CPP budget will give priority funding for social welfare, employment, environment, preventive health programs, crime prevention and education in line with our principle of social justice. Substantial budgetary support for science and technology will be provided to ensure that we have the necessary human capital to compete in new the global environment and meet the needs of industry. Our single-minded purpose is to use innovations in science and technology to revolutionize our way of life, create employment and significantly improve the standard of living of all of our people. The Ministry of Finance & Economic Planning under a CPP Administration will use technology to protect valuable data, reduce fraud and corruption at our ports and revenue agencies and significantly increase revenue.

Finally, in line with our principle of Pan-Africanism, the CPP will actively seek the political and economic unity of Africa to establish the continent’s position in global affairs. Through this, we will open new doors of opportunity to our businessmen and women and professionals and create jobs that will enable our people to prosper in dignity.

Ladies and Gentlemen, this is the broad policy outline and the principles underlying how we will manage the economy of our country, Ghana. It is our hope that our alternative is clear and that the difference is evident in the priorities we have presented. Our insistence on bringing the economy back home will enable social transformation to occur.