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Opinions of Tuesday, 23 February 2016

Columnist: Ata, Kofi

Does Pastor Otabil really want the state out of hospitals and schools in Ghana?

Last week Pastor (Dr) Mensah Otabil was accused of calling for the overthrow of the state when he questioned the role of the state and its incompetence at the launch of a book in Accra. Among others, he asked the state to get out of hospitals and schools so that entrepreneurs and businessmen can run them because the state messes up everything that it gets involved. This article is the socio-economic analysis of his clarion call for the state to be run by entrepreneurs, businessmen and women in Ghana. I will leave out the political ramifications of his call in the discussion as many writers and commentators have done that and also to avoid a narrow party political discourse.

For easy reference, I quote the relevant sections of what Pastor Mensah Otabil was reported to have said at the book launch. “The state should stop monopolising and hijacking business opportunities from citizens and rather be an enabler for private organisations and individuals to do business and also run the country. I think one of the biggest problems nations like ours face is that the state, which should be an enabler, most of the time, becomes an agent of suffocation. There's too much impact of the state in the lives of the people...we have to get to the point where it's not the state running the country, it's the people running the country, it’s entrepreneurs running the country, it’s businessmen running the country. The state should get out of hospitals, the state should get out of the schools, the state should get out because they mess up everything they get involved in and get individuals to run the place".

On its face value, the above statement is what any entrepreneur such as Pator Otabil is expected to say. However, on critical examination, there appears to be contradictions in what Pastor Otabil is calling for. In fact, the call reminds me of the statement, “two legs good, four legs bad” in Animal Farm. There is no doubt that incompetence and corruption within officialdom is suffocating business opportunities and job creation in Ghana. There are reports of some foreign investors including Ghanaians in the Diaspora who gave up establishing businesses in Ghana because of bureaucracy and demands for bribes from state officials before relevant permits and licences could be issued. Notwithstanding such difficulties, to call for entrepreneurs, businessmen and women to run the state is either disingenuous or Pastor Otabil does not understand the state and its role in society.

The state is a politically organised community with or under a sovereign government. It is the responsibility of the sovereign government to ensure the peace and security of the state and to provide internationally accepted basic levels of living condition or standards through the provision of goods and services. The state fulfils its obligations in partnership with non state actors including entrepreneurs, businessmen and women such as Pastor Otabil. The state does not, cannot and should never abrogate its responsibilities wholesale and franchise them to non state actors as being suggested by Pastor Otabil. This is because most if not all non state actors are motivated by profit or return on their investment. Areas such as education, health and infrastructure development could not be purely for profit. Therefore, the state must play a leading role in the provision of infrastructure development, education, healthcare and others. That is part of the enabling role of the state to ensure that there are well educated, skilled and healthy citizens so that the private sector could rely on to create jobs and wealth.

There is also one other critical role of the state, that is, to regulate society as a whole, particularly powerful individuals and organisations from abusing their power, wealth and influence in society. This is normally done through the enactment of laws, rules and regulations by the elected government of the citizens (the Executive and the Legislature) under the supervisory authority of the Judiciary together with accountability roles of the media and civil society organisations. The passage of laws, rules and regulations is another aspect of the state’s obligations that cannot be taken over by entrepreneurs, businessmen and women as being suggested by Pastor Otabil.

So what did Pastor Otabil mean by “there's too much impact of the state in the lives of the people...we have to get to the point where it's not the state running the country, it's the people running the country, it’s entrepreneurs running the country, it’s businessmen running the country”?

I do not believe that Pastor Otabil was calling for the overthrow of the state or voting out of the government of the day to be replaced by a government of entrepreneurs, businessmen and women. Rather, he is calling for a situation in Ghana where entrepreneurs, businessmen and women would have unfretted powers to do their businesses without any hindrance or state interference to the extent that state policy would be dictated by them. In other words, some form of free for all vulture capitalism in Ghana. Where does this utopian capitalism being suggested by Otabil exist?

Even in the advanced capitalist states such as the US, Germany, UK, France, Japan, Canada and others, there is no such capitalist system where the state has abdicated its responsibilities and given the running of the state to entrepreneurs, businessmen and women. These countries where there are multi-billion dollar multinational companies with well developed infrastructure, the education and health policies as well as services are still run by the state and not solely by non state actors or entrepreneurs and businessmen.

The socio-economic risks of Pastor Obtabil’s call for the state to be run by people of his kind could be dangerous to the very existence of the state. For example, the last time there was some semblance to what Pastor Otabil wants in Ghana, when entrepreneurs, businessmen and women partially took over the running of states in the most advance countries, we had the global financial meltdown. The global financial crisis in 2007 was caused by greedy bankers and venture capitalists when governments failed to regulate them. In fact, not only governments failed in their duty to regulate them but also bankers were in charge of making up the rules as Otabil wants entrepreneurs to be in charge of running the state in Ghana.

The ramifications of the banking crisis in addition to the bail out by the tax payers included millions of job losses across the globe, draconian austerity measures by governments, disintegration of families, loss of homes because those who lost their jobs could not keep up with repayments on their mortgages, increased in metal health illness, etc. Despite the high level of development, the impact on society of such recklessness by entrepreneurs is obvious and we are still paying for it.

Another danger of Otabil’s call is tax avoidance. For example, in the advanced western countries, entrepreneurs and multinational companies use their power, wealth and influence to ensure that tax policies are in their favour in order to avoid paying taxes to the state as many millionaires and companies like Google, Facebook and Amazon have been accused of tax avoidance or paying minimal taxes in the UK, whilst poor workers, small and medium enterprises (SMEs) pay their full taxes to the state. Again in the UK, when entrepreneurs were allowed to run public hospitals and they realised that they could not make profit, they just abandoned the contracts, left many patients at risk and workers with uncertain future as was the case of Hichingbrooke Hospital.

These are some of the consequences of ‘good’ entrepreneurs gone bad running the state. What about ‘bad’ entrepreneurs running the state?

In the event of bad entrepreneurs running the state, the socio-economic consequences could be more damaging for the state and its citizens. In fact, the very existence of the state could be at risk. For example, when drug cartels take over the running of the state, there is complete breakdown of law and order, which could lead to the potential risk of a failed state. With weak institutions and corruption in Ghana, drug cartels could make Ghana their base under the guise of entrepreneurship and being part of Otabil’s enterprise state running machinery to build and manage hospitals and schools as well as run the state.

In conclusion, though Pastor Mensah Otabil has the right to complain about the incompetence, bureaucracy and corruption that is stifling entrepreneurship in Ghana, it dangerous for him to call for entrepreneurs, businessmen and women to run the state and for the state to get out of hospitals and schools. Even in the US, the state has a key role to play in education and healthcare. The notion that the state is bad at running goods and services and the private sector is good at running everything is a myth similar to Animal Farm’s “four legs good, two legs bad”, when in reality though all animals are equal, some are more equal than others. What people like Pastor Otabil do not know or do not want the people to know is that when entrepreneurs, businessmen and women take over the running of public services, they are able to make profit at the expense of huge state subsidy to them. For example, the privatised railway companies in the UK receive millions of tax payers’ money annually in the form of state subsidy.

No country is run by entrepreneurs and no country hands over the provision and running of education and health care to the private sector. Healthcare and education cannot be provided solely for profit. The state of Ghana must weed out corruption, improve efficiency and create the conducive environment for business to thrive, grow and develop but the absence of these conditions must not be a reason to call for the state to be run by entrepreneurs, businessmen and women. Such call is dangerous and a recipe for a failed state. The analysis is not an argument for state monopoly; neither is it against private enterprise but a case for common sense and pragmatism.

Kofi Ata, Cambridge, UK