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Business News of Saturday, 24 October 2015

Source: B&FT

Will 40-year blueprint survive NDC?

Dr. Nii Moi Thompson, Chairman of NDPC Dr. Nii Moi Thompson, Chairman of NDPC

While Dr. Nii Moi Thompson and his charges at the NDPC believe they are trying to put an end to decades of reactive planning in Ghana, the opposition NPP has made no secret its lack of admiration for the effort -- bringing into question whether the plan will survive the NDC in government.

When he launched the start of a process to initiate preparation of the proposed 40-year development plan, President Mahama said the efforts “must lead to a lasting legacy for generations yet to come”.

But the New Patriotic Party will have none of it -- especially as it feels the Mahama administration has demonstrated no capacity to resourcefully manage the economy now or in the future.

“If we cannot implement a one-year budget, how can we keep to a 40-year plan?” asked the NPP’s Member of Parliament for Old Tafo, Dr. Anthony Akoto Osei, on TV3’s Hot Issues.

“I think it is a hoax,” added Dr. Akoto Osei -- who could be Finance Minister if the NPP wins the 2016 elections and would have significant sway over the fate of the 40-year plan that is expected to span the period 2018 to 2057.

While the National Development Planning Commission (NDPC) has said it is not an extension of the ruling NDC, and indeed, it should not be because of its constitutionally independent mandate, the country has a history of politicians determining the fate of statutory intuitions in terms of personnel and resources, among other things.

Aside the fact that some people are not amused about the GH?10million being spent to prepare the 40-year plan, the NPP has queried what planning its fierce rival has been doing in government when it is presiding over a ballooning debt stock, uncontrollable inflation, and an electricity crisis that is crippling industries, among others.

Per Bank of Ghana figures, the country’s total debt stock now stands at GH¢94.5billion, representing 70.9% of Gross Domestic Product (GDP). The debt stock increased by an extra GH¢5billion between May and June 2015.

While government had hoped for single-digit inflation this year, the figure for August stood at 17.3 percent -- a drop from the previous month’s figure of 17.9 percent.

InvestCorp -- an investment advisory firm -- recently said of Ghana thus: “Noticeably, recent inflation cycles have been erratic, with a 5-year low and high of 8.4 percent and 20.7 percent respectively; which has helped to shape market inflationary expectations to the upside, and introduce a degree of uncertainty in medium- to long-term macroeconomic expectations”.

The bit about the country’s woes that most citizens are particularly worried about is, perhaps, the niggling electricity shortages -- which the World Bank said emerged as a “key barrier to growth” in the country in 2015.

Dr. Nii Moi Thompson, who is leading efforts toward preparation of the 40-year long development plan, argues that it is for the very lack of long-term planning that the country is mired in so much difficulty.

Speaking to a cross-section of Ghanaian and South African business people in Accra on Monday, the Director General of the National Development Planning Commission drew comparisons between Ghana and South Korea, saying between 1960 and the year 2000 Ghana’s per capita income moved from being 73% higher to only 7% of South Korea’s.

The reason, he said, is that while South Korea embarked on “an ambitious long-term national development strategy,” Ghana, on the other hand “moved into a period of uncoordinated, short-term, sometimes no plan at all; more or less muddling through, hoping that things would happen…”

The basis for the preparation of a long-term plan, he said, is legal -- making references to Article 87(2) of the 1992 Constitution, which states, among other things, that the NDPC shall “make proposals for the development of multi-year rolling plans taking into consideration the resource potential and comparative advantage of the different districts of Ghana”.

Regarding concerns that a plan spanning that long a period could restrict political parties in government, Dr. Thompson said the concerns have no merit since as a framework, the long-term plan would not displace the plans of political parties.

The plan, he explained, has been broken down to four ten-year medium-term plans, and that it makes room for the four-year plans of the political party in government under the Ghana Shared Growth and Development Agenda.

“Don’t forget, an economic plan is simply an aggregation of the social and economic aspirations of a people. Those aspirations must be translated into the physical world -- the buildings, the schools, the bridges and what have you. If you don’t plan those, and you just build them anyhow, the result is sub-optimal or inefficiencies; and you see that all around you…” he said.