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Opinions of Thursday, 25 March 2010

Columnist: Adu-Gyamfi, Kwaku

Welcome To The La-La Land: Inflation Is Down, But Discontent Is Growing!

The Voice Of Reason:

OK, LET’S UNCORK THE champagne and inflate the balloons—the “inflation rate drops to 14.23 percent in February”.

Big deal !

The Ghanaian policy makers are going gaga over the recent news report that inflation rate was down in February. But, ask an ordinary Ghanaian on the streets of Ghana and you will hear a different story. It all depends on where one was sitting or what one was eating or drinking and doing the counting and tabulating the numbers.

It’s true; one’s socio-economic position can easily distort his perception. That’s why it’s very important for our Mps and policy makers to go ‘undercover’ and spend just a day or two with the people their policies are designed to affect. They will learn things about life that they never thought human beings should endure.

According to the news report, the inflation rate went down a few notches in February, and our policy makers are trumpeting it in the news as ‘good news’. But, they are providing quite a bit of material for comedians.

Well, after you borrowed money to finance your lavish lifestyle just go ahead and brag about your fiscal prudence and how you’re controlling your finances---good job!

I wonder what they were celebrating when Ghana’s mushroomed debts are owned to foreigners and our state-owned companies are a waste of national resources.

How do we keep up with the payments on the loan and deal with the budget deficits, resulting from our financial mismanagement, weak economy and lack of productivity? We’re somehow caught in the borrowing vise and there is no end in sight. But, sooner or later our creditors will no longer finance our excessive borrowing taste—then what are we going do?

Folks, why are we still keeping useless and wasteful state-owned companies when we need money for investment?

Ghana-owned companies and corporations are bleeding cash and they’re deep in debt but, we’re not doing a damn thing to fix the problem.

Oh, I get it! Millions of people who have come to rely on these state-owned corporations for their pensions and livelihood will not give up their benefits easily .They don’t even think they have to be the ones to sacrifice for the nation ,regardless of the severity of the economic problem the country is facing.

But, this has been known since the beginning of time: That state-owned companies and corporations don’t strive well. But, who cares! They just serve the political purpose. The government does that to keep the political peace, whilst the Trade Unions are kept at bay.

For one thing, Ghana is suffering from large deficits for decades and it always counts on foreign donors to bail it out. Why bother to strive for yourself when you can depend on others?

While most Asia countries invest their money and save to build their infrastructures, Ghana borrows, spends and watches its infrastructures deteriorate beyond repairs. We never had money to maintain our roads, schools, hospitals, office buildings, houses, Palaces, court houses, Prisons, police stations, Parliament House, harbors and bridges and railways lines---stop me before I take you into the sea!

The point is Ghana is overburdened with debt, but it needs cash infusion desperately in part to finance development projects like, roads, schools and hospitals that may help sustain the country’s future economic growth. So we end up literally begging for handouts from the Western countries .But, they have problems of their own and still stumbling under the last year’s market crash. So let’s leave them alone for a moment because they’re not doing so well.

Besides, why do we depend on borrowing from foreigners to finance our development projects, and fill our leaking budget holes when we have state-owned companies that are underperforming and draining the nation’s blood? The government should find the better way to raise money other than depending on the foreigners to balance its balance sheet.

There are so many ways for the nation to raise money, but the easiest among them is divestment .To raise money the government should sell its stakes in state-owned companies like, the railways, Port and harbor and roads and bridges and toll booths. It’s no brainer!

With the spending on the interest payments on the debts owned to foreigners, the country can not provide other needed social services, like education and health-care that we badly need.

Historically, in Ghana government-owned companies have been under performing for several decades. And, they are a waste of the national resources. Do the former Ghana Airways and Black Star lines ring a bell? Should I go on? Please don’t get me started! Have you seen a profitable government company or business lately? Name it to me; I want to know about it!

The fact of the matter is government can‘t and shouldn’t run anything of commercial or entrepreneurial set- up because government’s businesses by their nature were not designed to make profit----period! They are designed to be political backbone of political patronage—providing for example, relatively secure and high-paying jobs for the ‘boys’ and to members of the political parties and their families and the élites.

In other words, government-owned businesses are nothing other than to perpetuate job hub for the members of the party in power and the political class and pressure groups. How could the existence of former Ghana airways, Ghana railways, Port and harbor, Motor vehicle services and……… (Stop me and add your own list) –be possibly justified?

As a result of this job- for- the- boys mentality, politicians and policy makers find it difficult, if not impossible to let go of these ailing companies though they are aware that they’re economic hemophilia. The argument that these state-owned companies are our national pride doesn’t hold water anymore, so let’s be realistic and take these bulls by their horns.

Adding to our economic pains these state-owned companies and corporations are used to control the jobless rate, which is still seriously out of control. But, how long can we use shady economic policies to achieve any meaningful economic goal? There is timeless truth about the external debt which is weighing on the country’s ability to provide other much needed services for its citizens to meet the challenges of this century and beyond.

The increase in spending, to finance the huge debt, will eventually limit the amount of money available for the nation to spend on long-term needs.

Yes, it sounds a very simplistic way of raising capital for our government, but do we really have a choice? Or can we continually finance our national crumbling infrastructures on the back of the world’s tight financial market and still survive as a nation?

We owe it to our kids and grand kids to take bold measures now that we have time. But, don’t hold your breathe!

Just try to suggest this idea to your co-workers at a state-owned job and see what will happen to you. I wonder why! What are they afraid of? The culture of entitlement makes government’s workers very hostile to change because they feel years spent on the job alone should give them life time entitlement.

Let’s look at the U.S Postal service system, while it’s bleeding blood profoundly, private companies like UPS, FedEx and other couriers are laughing all the way to the bank. That goes to show that government ran businesses don’t do well.

With out a doubt, job security and attractive emolument are very important. However, rewarding failure, low productivity and sustaining non-profitable state-owned companies have no basis in our current economic challenges. So let’s put aside our political ideologies, and transparently privatize these ailing state-owned companies and save the national resources they are squandering. But let’s do well to reinvest the proceeds in other sectors of the economy.

This is not a knee-jerk call for total privatization of all government’s companies and corporations.

Mind you, I’m not suggesting that we should privatize our state-owned corporations haphazardly.

By the way, don’t believe the hype, “the inflation –drop” news is nothing to write home about when we’re still borrowing to finance our development projects. So let’s sell all the ailing state-owned corporations!

Yes, I know privatization of government’s corporations doesn’t always mean better services or more accountability, or committed professional workforce which is focused on the needs of its customers but, it’s something to think about.

Do I believe that could change the minds of our policy makers? I don’t know !. But, it’s certainly worth a shot.

Somebody has to say it, no be so?

Kwaku Adu-Gyamfi (The Voice Of Reason)

NJ, USA

*The author is a social commentator and the founder of Adu-Gyamfi Youth Empowerment, Educational and Apprenticeship Foundation of Asuom, Akim.