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Opinions of Wednesday, 6 August 2008

Columnist: Ato Kwamena Dadzie

THE OUTSIDER: An idiot's guide to running a country on a shoe-string budget

Just a few days after President Kufuor got on jet for yet another expensive but inexplicable foreign trip, we were told that instructions have been issued to all government agencies to reduce their projected spending for the rest of the year by as much as 50%. It is yet another attempt by government to ensure that we don’t go into an economic meltdown. The fact is that our economy is being battered by the one thing which, they say, should give us hope for a prosperous future – oil!

In a bid to cushion Ghanaians against the economic hardship brought on by the fuel price hikes, the president announced what was referred to as a “mitigation package” in May. Import duties on some crude oil products as well as some food items were removed. The assumption was that this would make food cheaper and reduce transport fares. Three months after the package was unveiled nothing much has changed. I’m no economist. But I knew that package would only enrich a few people. (See the article titled “Economically expedient rescue package). In that article I said the mitigation measures will not reduce prices and fares. Unfortunately, I’ve been proved right. But I won’t gloat.

If petroleum prices do not tumble any time soon, we could be so cash-strapped we might not have enough money to even import crude oil. And when that happens, we will be hit by a major petroleum shortage and long queues will form at petrol stations. The picture doesn’t look pretty at all.

I hope it doesn’t come to this. That’s why I have decided to publish my ‘idiot’s guide’ of common-sense principles for running a country (or any economic entity for that matter) on a shoe-string budget. I say they are common sense principles because you don’t need a university degree from Oxford or Harvard to appreciate and apply them. All you need to know is basic arithmetic – add, subtract, multiply and divide.

The first principle in running a country (or a household) on a shoestring budget is to constantly remind yourself that every cent (or pesewa) counts. Nothing should be wasted. To ensure that nothing is wasted, you should have a very clear focus not just on the things you need but on the things you need the most. For example, we need football stadiums. But we need hospitals and clinics the most. We need a nice presidential mansion but what we need the most are well-equipped universities which provide very good conditions for people to develop their minds. A poor mother struggling to take care of her children will never think of buying gold jewellery or the latest GTP Hollandaise. In the same manner, if you are running a country on a shoe-string budget it should never cross your mind to buy gold medals to ‘bling’ yourself out.

Eliminating waste also means that you need to check thievery. We all know of former paupers who have suddenly become wealthy after getting into government. Most of them are thieves who stole our money or have been engaged in one corrupt practise or another... and they continue to steal because they know that if anyone raises an alarm about their thievery, the president will rise to their defence and ask for ‘evidence’. This demand for evidence always means that the accuser has to conduct his own investigation and produce the evidence necessary for nailing the rogue official. The government needs to do more to check thievery. For example, the president should move the office of accountability from his bedroom and put it in a place where we can all see what it’s doing.

Secondly, if you are running a household on a shoe-string budget, you don’t delight in travelling “by heart”. You don’t accept any and every invitation to attend funerals, ‘outdooring’ ceremonies, get-togethers and ‘meet me theres’. This should apply to the leader of the nation as well. The decision to instruct government agencies to revise their budgets was taken before the president left for Trinidad and Tobago. But no one had the guts to tell him that if he is really intent on saving money and reducing needless expenditure he should stop racking up the frequent flyer miles. Hasn’t he seen enough of the world already?

Each day the president spends out of this country, it is estimated that we lose about $50,000. That is a lot of money, especially when the president stays out for two straight weeks. It goes mainly into the per diem of members of the presidential entourage as well as that of the president himself. They won’t tell as exactly how much the president’s per diem is but sources say the figure is close to $3000. The most annoying thing is that since he came to power, President Kufuor hasn’t been paying any taxes. Apparently, there is a law that the president is not supposed to pay taxes. It is such a stupid law and it should be scrapped. If the president earns so much money and doesn’t pay taxes, why should I pay taxes for him to use to travel anywhere and anyhow he chooses. I think the president should stop taking per diems. We know he enjoys travelling but we shouldn’t pay him to do what he enjoys so much.

The point I’m making is that in their quest to save money and prevent a major economic crisis, government officials should tell the president that he has seen more of the world than most Ghanaians will do in ten life times. After the China trip, he shouldn’t go anywhere again. And please, we’ve had enough of the excuse that these travels are important because he always returns with loans or promises of grants. We can get the loans without these costly trips. If a Nigerian fraudster can sit in Lagos and get a man in Copenhagen to transfer hundreds of thousands of dollars to him, I think our president should well be able to sit in Accra and negotiate a good deal with President Hu Jintao of China without necessarily having to travel to Beijing.

Thirdly, when running a country on a shoe-string budget, it’s is important to make sure that you don’t employ more people than you need. It’s tempting to take on more people for parochial reasons. But such an attitude costs so much money and often results in inefficiency. Any forward-looking company faced with a slump in revenue will first think of laying off some staff. If things are not going so well for our country, I think the time has come for the administration to lay-off all those ‘useless’ ministers of state with non-descript job specifications. Why do we have an Interior Minister and a Minister at the Interior Ministry? Why do we have a Presidential Affairs Minister and Ministers at the Office of the President? There are too many hangers-on in government and they have to be sacked. They are a drain on the coffers and the sooner they were laid off the better.

After getting rid of all the ministers we don’t need, it is also important that those who remain are made to pay bills like we all do. For a poor country like ours, it’s incredible that government officials and senior public servants enjoy so many freebies. They don’t pay water bills, they enjoy free electricity and they (and their wives, kids and concubines etc) can talk all they want on the telephone. We will be saving a lot of money if we compelled the ministers of state to start paying bills like we all do. The freebies should end.

Ministers and government officials should also be well advised to use official vehicles with as much caution as their own. We see ministers every day using official vehicles for so many unofficial things – like chasing girls at Legon. On weekends, government officials are seen at funerals and weddings all over the country. All these cars are fuelled by the taxpayer at great expense. I don’t like attending funerals so why should I pay for a government official to go to one? I’m not saying they shouldn’t go to funerals if they want. They can go to every funeral in any village or hamlet they want. But they should do so at their own expense and in their own vehicles.

Finally, if you are running a household on a shoestring budget, it’s alright to sell off stuff you don’t need. Is it wise to have a 32 inch plasma TV when you are hungry? Just sell it off and use the money on the stuff you need the most. The same applies to a nation on a shoestring budget and that’s why I’m all for the plan to sell off Ghana Telecom to Vodafone. But that’s a story for another day.

I could go on listing more common sense principles for running a country on a shoe-string budget. But you should all be able to think about the rest. It’s “common sense”, remember?