Election'04: It's Still The Economy

Bright lights of Ghana economy under a bushel for country's poor
ACCRA : President John Kufuor is banking on the economic growth that has made Ghana a bright African spot for international lenders to return him on Tuesday to another four-year term, but Ghanaians may turn the pinch in their pockets into a thumbs down at the polls.

Revenues from record exports of cocoa, declining inflation and a respectable five percent growth rate over the last year have helped vault Ghana into the ranks of those nations on the world's poorest continent favored with attractive development aid.

Ghana's reputation for stability and tolerance under Kufuor has also translated into a record 1.5 billion dollars in remittances this year from the Ghanaian diaspora.

External reserves of just two weeks inherited by the Kufuor government in 2000 have been built up to last four months, helping to keep food prices stable and to slash the inflation rate to 12 from 42 percent.

Yet Ghana remains desperately poor, with 40 percent of the country's 20 million people -- mostly in the rural north -- living below the poverty standard of a dollar a day set by the United Nations and ranking 131st on the UN Development Index of 177 countries.

"Nothing has gotten better. We are still hungry," said Marlee, a market woman tending a meagre pile of bananas and peanuts for sale by a road in the capital Accra.

"We have school fees, we have medicines to buy; we cannot see the riches that they say have been brought here."

A member of both the World Bank's Highly Indebted Poor Countries (HIPC) initiative and the US Millennium Development program, Ghana has succeeded in paring down its six billion-dollar external debt while paying for much-needed social programs in health and education.

"HIPC has helped Ghana considerably, saving 100 million dollars that would have been spent on debt servicing," said Kwesi Jonah, head of the Institute of Economic Affairs, an independent public policy group.

"It's even been used to pay off the internal debt, a lot of which the Kufuor government inherited from (former president Jerry) Rawlings, but which Kufuor's government has added to as well."

Ghana's recent successes are also due to circumstances beyond Kufuor's economic policies, his main rival, John Atta Mills of the opposition National Democratic Congress, is quick to point out.

"We had good rains," he told AFP in an interview on Saturday before a rally of 40,000 of his faithful.

"One has to wonder why things are not better for all the rain we had."

The Kufuor government's continued subsidy of petrol, even as prices per barrel of oil hit record highs this year of more than 50 dollars, has been cited as one of the reasons why by independent economists.

"It's a stupid policy," the IEA's Jonah told AFP. "Even though the price has been increased to 20,000 cedis (2.22 dollars per gallon), we are still wasting millions of dollars on petrol subsidies. We could do it when oil was 32 dollars a barrel, but not now."

"There is no point -- these are subsidies that benefit the wealthy people living in urban areas, meaning that the villages are subsidizing us," he added.

Kufuor also faces criticism and accusations of corruption for politicizing the HIPC process, structuring the distribution of funds to bypass parliament and allocating the bulk of the resources to his ruling party's central and southern strongholds instead of those most in need: the northern regions crippled by poverty levels reaching 70 percent.

Such perceived inattention to the poor has fueled charges of elitism that Kufuor will have to address should he meet the conventional wisdom that has him heavily-favored for reelection victory.

"Democracy and poverty cannot sleep together in the same bed," said Jonah. "People are seeing that things are supposed to be better but they are not feeling better."