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Opinions of Tuesday, 11 September 2018

Columnist: Isaac Newton Bortey

Desperate visits: Baldwin, Merkel in Ghana

In 1957, Ghana weaned herself off colonial rule; at least in the political sense. We took control of our destiny—elected our leaders, took decisions on our own and managed our resources for the common good. Sixty-one years on, and Ghana remains a protégé of her colonial master and other world economic leaders. The country has not been able to stand on her feet in matters of economic development. Like Christians kneeling before the Throne of Grace, we are constantly on our knees before our donors.

Perpetrating UK’s Self Interest

Harriet Baldwin, UK Minister of State for Africa, joined the list of prominent UK officials that have visited the former colony. The publicity and usual Ghanaian hospitality that comes with such visits should not shroud the purpose of the visit. Theresa May is desperate. The UK’s focus was not necessarily on the development needs of Ghana, but on how colonial development might best support the British economy. The visit forms part of the grand solution to the problem of how the UK can reverse its dwindling global power and influence following its departure from the Western European bloc (European Union) under Brexit.

In her visit to South Africa, May announced Britain’s new ambition to boost investment in Africa. May said, Britain wants to become the biggest investor in Africa out of the G7, overtaking the United States, by using the aid budget to help British private sector companies invest on the continent.

This is no different from the objective of the UK Colonial Development Act, 1929, which authorizes the UK to make advances—loans, grants— to government of any colony or of any, for the purpose of aiding and developing agriculture and industry in the colony or territory, and thereby promoting commerce with or industry in the United Kingdom. It’s all geared and framed towards deepening and increasing UK influence in the former colonies.

Baldwin came to Ghana with a trade and investment package in-hand. At best, the £20 million package was a mix of carrot and sticks and a beggar thy neighbor policy. She said the focus of the agreement will be on some policy suggestions to make it easier to do business in Ghana, and the promotion of opportunities for inward investment into Ghana. So, in effect, the UK wants to use aid for trade. It wants to use aid as a moral suasion tool for Ghana to open up her borders to the UK.

Trade balance for Ghana is likely to worsen further when this agreement comes to force. The UK will ride on its illusionary “attracting UK investors into Ghana” to export and dump more products unto the Ghanaian market. Ghana on the other hand has less capacity to export more to the UK. It hasn’t been long when Ghana signed the Economic Partnership Agreement (EPA) with the European Union.

The agreement is not significantly different from what Ghana has signed with the UK. The dynamics, phrases for the terms and condition may be different, however, both agreements focus on trade between the two sovereign entities. Statistics from the EU Trade Directorate shows that in 2017, the EU imported goods worth €2,119 from Ghana while it exported €3,057 goods into Ghana. This left Ghana with an unfavorable trade balance with the EU. Additionally, majority of Ghana’s export were agricultural produce.

Logically, if Ghana is unable to realize full benefit from her trade agreement with the larger EU single market, she shouldn’t sign another. However, the colonial master used the same old tactics. The grant that was tied to the agreement was the carrot to get Ghana to sign the deal. We are on the verge of making our economy highly import-dependent. And this can open the pandora box of further economic challenges should the export-countries suffer any shock.

What could drive UK’s renewed commitment to Ghana and the continent at large? Two years after the landmark Brexit referendum, the UK economy has stagnated. May’s exit plan was dealt a blow, after Conservative MPs frustrated her plan for a UK “customs partnership” with the EU. The EU, also, in its post-Brexit negotiations with the UK has been reluctant to grant UK access to the single market. UK trade partners outside the EU—US, Canada, China, Japan—have all hinted on a not too easy trade agreement with Britain.

The price of trade agreements with these countries are too high as to make them unworkable. As a continent of last resort, the UK has turned to Africa, especially its former colonies—who are still poor—with a policy that will provide trade outlets to UK products and investors. The policy is obviously with British at heart and far from a win-win situation for Ghana and her underdeveloped African cronies.

Also came the German leader

Unlike Baldwin, Merkel’s visit was centered on migration and business. The visit was heralded by the announcement of a Volkswagen (VW) assembly plant in Ghana. Although this is good, there is more to the visit. After Trump whiplashed the NATO submit, Merkel and her EU has taken note of a possible faltering world leadership.

Migration from the continent to Europe is high on the agenda in German and the developed EU countries. The German leader who refused to completely close her borders to migrants believes that investing more in West Africa will help keep its people from migrating to Europe. In simple terms we are giving you business opportunities at home to discourage your people from coming to Europe. The Ghanaian president made no mistake in capitalizing on the migration crises to pitch for more German investment in Ghana. The president stated that "the stronger we are the better it is for our youth to stay."

So, the UK and German were here, to push the interest of their people in accordance with their own foreign policies. As a country we have long celebrated the visits of such high-profile world leaders at the expense of analyzing what they truly came with—their national interests. The two visits have brought us a £20milion agreement and a possible Volkswagen assembly plant, but as they say, there is no father Christmas in the international world.