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Opinions of Friday, 12 July 2013

Columnist: Akrofi, Hayford

CPP’s Position on The Economy of Ghana

Hayford Akrofi Member of CPP

I have observed over the years the economic problems facing the nation and our people. The amazing thing is that every now and then one hears about Ghana being at the middle income level, Ghana aspiring to attain high end middle income status, over 46% of the population being middle class with spending wherewithal of $20 per day, Ghana’s economy being one of the fastest growing in Africa and even in the world.

Laudable, but is that the truth?

We don’t know who we are deceiving or over whose eyes we are attempting to draw wool. It seems like the ostrich pretending to be hiding from view because its head is buried in the sand.

Currently, many families are living on remittances from kith and kin abroad, many households have no formal income, our cities are in desperate insanitary conditions, Accra is viewed as the ugliest after only Detroit which is currently seriously remaking itself making the prospect that it may outstrip Accra to bring it to the top of the pile of ugly cities. This is a report that was widely published recently.

Our economy is stuck in a rut, annually seeking 40% of our budget from aid and donations to balance it, and has a national budget that utilises 60% of it to pay wages leaving 40% for all other national activities.

With all these imminent economic problems, the bizarre youth unemployment, youth petty hawking between vehicles, a disparate energy programme that lacks any coherence, potable water that never reaches any home, address system that is medieval, postal system that no one knows how a population of 25m can all own post boxes, a national telecom system that has been high jacked by some European backyard mobile company that has been banned in some European countries at one time or another. We believe that as a nation we have really huge economic problems.

I have read with some interest, or may be trepidation, the recent NPP proposed panacea for reviving this drifting economy and have note their 6-point plan which they believe will do well to restore, revive or may be rationalise the nation’s economy if undertaken as follows: - restoring fiscal discipline in all departments of the public sector; - reducing the appetite for borrowing from both domestic and foreign sources; - a focused plan to enhance revenue mobilization but not through increased taxation; - reviving Ghana’s ailing agricultural sector; - job creation; and finally - the appointment of competent people to run the affairs of the

While these, more or less, completely and woefully fail to appreciate the precarious nature, form and performance of the nation’s economy they lack any transformative proposals to remedy the limping along that the economy experiences.

I would like to believe that Ghana’s economy requires a major root and branch transformation and comprehensive restructuring to bring about a new direction, expansion, growth and development through a thoughtful well researched preparation and implementation of a NATIONAL ECONOMIC DEVELOPMENT PLAN to lay down a structured basis for the following:

- a programme to wean the nation off aid dependency within a reasonable time and a time table to doing so; ? - a definition of the economy in terms the productive and manufacturing sector and service sector proportions so as to understand its performance and for targeted rational adjustment remedies if required;

- programme for infrastructure renewal and development, energy rationalisation, water supply, sanitation;

- a programme to undertake modernisation and innovation in agriculture, availing research and development information and providing for mechanisation, science and technology in methods;

- the resolution of the question, land ownership, land acquisition, land reform, regional planning and land use regimes;

- the re-direction and a fit-for-purpose content for a new education programme

- a programme of import substitution, such as the GIHOC enterprises sought to do that have been systematically eroded shared up;

- a plan for undertaking value-added stance to our produce and products before exporting;

- a policy to review our tax regimes to claw back most or all of the capital flight that exits the economy through the hitherto timid taxation especially by the mining companies;

- a strengthening and creation of robust measures for rational management of fiscal and monetary policies;

- the making sure that people in position, policies implemented, state institutions are effectively monitored and demanded to function effectively;

- a policy to require that universities and other higher education institutions become centres of evolution of practical ideas for industry blending academic work with real life practice and translating student work and research findings into real life business materials;

- the strengthening and modernisation of the public sector to confidently set benchmarks and standards to support and assist the private sector to build capacity and obtain research information for development and efficiency; etc

Job creation is very important but it must not be just any jobs. Jobs must be linked to education, personal development such as life-long learning, desirable skills training and retraining and accumulated knowledge to offer fulfilled jobs fit. As such I would like to indicate that youth employment, youth mobilisation, the National Service Scheme and adult job creation must be given serious thought not just some cursory mention. Refresher courses, continuing professional development, targeted skills training, self-improvement part-time on-the-job learning opportunities must be created. We note the effort of the NPP in teacher opportunities in this direction but needs to be linked to a well-structured programme.

It is my view that large and bold capital projects, dashing and ground-breaking environmental engineering projects, innovative housing especially rural housing and other daring programmes must be undertaken. Towards this, I believe that the CPP expects that project financing and loan transactions must be conducted prudently by Government based on a costed and phased NATIONAL ECONOMIC DEVELOPMENT PLAN and not on some haphazard piecemeal uptake which eventually become non-worthwhile and unproductive debt accumulation. ? Ghana is the EIGTH producer of Gold in the world after China, Australia, USA, Russia, South Africa, Peru and Canada and SECOND in Africa after South Africa. Among the top producers of gold it is only Ghana that doesn’t process its gold. All the others do. The programme to obtain certification rights which were at advanced stage in 1966 with the then Soviet Union was abandoned after the 1966 overthrow under the orders of the powers that were then. All the succeeding governments have not had the backbone, courage, desire, appetite and the political will to do anything about it.

The production output targets of the top TEN producers are as follows: 1. China 355,000 kilograms 2. Australia 270,000 kilograms 3. United States 237,000 kilograms 4. Russia 200,000 kilograms 5. South Africa 190,000 kilograms 6. Peru 150,000 kilograms 7. Canada 110,000 kilograms 8. Ghana 100,000 kilograms 9. Indonesia 100,000 kilograms 10. Uzbekistan 90,000 kilograms

These are the issues on the economy the CPP would like to bring to the nation’s attention. Our view is that without a well-researched and rational NATIONAL ECONOMIC DEVELOPMENT PLAN any effort at economic solutions would be pedestrian and not comprehensive indeed.

By the way, it is worthy of mention that during the EIGHT YEARS of the NPP government, economic management left a number of brow-raising economic measures notable among them:

- the HIPC devastation and shaming of the nation;

- wastage at the VRA with the purchase of useless generating equipment and non-fitting spare parts at over £70m intended for the Kpong Hydro project now left in the open to rot with high concrete enclosing fence walls to obscure public view;

- the rush to produce oil without sufficient preparation and planning laying waste vast quantities of ancillary gas only for the nation to contract to purchase gas from elsewhere for power generation and domestic consumption;

- the windfall gain of 3% of Jubilee Petroleum bounty to the EO Group recently purchased by Tullow Oil for US$ 305m acting as introducers of Kosmos to the NPP Administration;

- the US$ 4.5billion Kosmos windfall after spending a fraction of that to prospect a terrain that had existing morphological information and handed unhindered free access to GNPC geophysical mapping information of considerable value;

- the under-priced rushed sale of Ghana Telecom to Vodafone for a price of US$ 900m in 2008 when in 1996 the then NDC 1 Administration had appointed Nana Akuffo-Addo’s Law Firm to write a contract for the then proposed intended sale to Vodafone at a cosy professional fee of £600,000 or so. And curiously in that year of 1996 the value of Ghana Telecom was put at US$ 1,200m. 12 years later it had dropped by US$ 300m with the government uninhibited in its desire to push through such sale. Every effort of government was to run Ghana Telecom down by giving free phone facilities to all members of government and their unrestricted use by family members as well as any associates to rump up deficits and losses at Ghana Telecom to justify its cheapened flogging. Would this not be curious?

- and a host of others. ? The nation is grateful to the NPP for rediscovering and re-defining their economic management ideas to be advising the government of prudent economic management which so eluded them in their EIGHT YEARS of rule.

While not holding brief for the NDC and their performance, I find the advice on economic management very rich coming from the NPP. As far as the I am concerned the economic performance of both the NPP and NDC are woeful and rudderless. To my mind the NPP is behaving like the winging baby whose broken toy has been taken away by someone and wants it back. If even it gets it back that toy would still be broken but our winging friend would be satisfied and have it cleaned up with the 6 points in its broken state.

I believe that the CPP, given the opportunity, would abandon that broken toy and replace it with one that would be new, strong and versatile.