Crispus Ohene Ankomah: Does Ghana need constant foreign guidance for economic growth and sustainability?
The aftermath of elections in Ghana is austerity. You see all kinds of industrial actions and picketing to send a message to the high echelons of political authority. The reason is simple. Political parties break banks to win elections.
They provide goodies under the cloak of social intervention and protection and this dramatically increases the cost burden of government whose brunt citizens have to bare through introduction of new taxes and increments in taxes.
The 7th parliament saw the need to pass a fiscal responsibility act to prevent government from spending beyond the 5% threshold but unfortunately, we haven’t been able to heed to it because of a pandemic.
The electoral commission has a duty to audit the finances of political parties but it just wouldn’t do so. There’s the need to develop a protective mechanism for our Public purse. Until we do that, the incumbent will keep breaking banks to win elections and we will continue to remain in this atavistic quagmire of retrogression.
The question is asked, however, ‘Does Ghana Need Constant Foreign Guidance For Economic Growth and Sustainability?’. Yes I think we do and it looks like the Blackman is not capable of managing his own affairs as Nkrumah envisaged. Why do I say so?
For 17 good times, Ghana has hung over the clutches of the IMF for balance of payment support, to be able to soak external pressure and generate internal revenue for public sector financing and capital expenditure. From the optics, every other time Ghana has been with the IMF, there has been consistent financial discipline, reduced corruption and an upward spiral in economic indicators like the growth rate and debt levels.
Reference is made to more recent history when in 2014 Ghana entered into and Extended Credit Facility IMF program which the newly constituted NPP government inherited. In the first term of the Nana Akufo-Addo-led government, the economic numbers were on an upward positive spiral.
Growth rate was 7% inflation in single digits and debt to GDP ratio was about 60%. Immediately we exited the IMF program in 2019, things began to deteriorate to the point where we run a budget deficit of about 14%. I agree perfectly that COVID-19 played a role in the erosion that occurred but it can be argued strongly that immediately we exited the IMF program, we threw financial prudence and discipline to the dogs.
Me and the many people who think like I do believe that Ghana Beyond Aid is highly attainable given the overwhelming presence of renewable natural resources in our country but for more than six decades different governments have touted different aphorisms which have all ended in an aggressive pursuit for foreign support rather than maximisation of local natural resources for economic growth.
Unfortunately, in 2022, Ghana has had to enroll on an IMF program again and borrow at concessionary rates to be able to enhance our balance of payment needs and the result of this will be that the IMF will have to conscientiously review the spending of government. Discretionary expenditure will have to be cut big time and government intervention in its major social programs like Free SHS may be halted to ensure a proper appropriation of our financial resources. Can we continue on this path? No we can’t.
It is time for our leaders to apply the many things that we learned in Social Studies at SHS and in History in the university for economic growth and development. These things have become repetitive like platitudes and like the Presby hymns sung in praises to God.
Why can’t we add value to our natural resources like Cocoa? Why do we have Gold yet we make the least of returns out of that mineral? Why do we have Tema Oil Refinery yet can’t process crude? Why do we import virtually everything into this country? Have we thought of equipping the Association of Ghanaian Industries to enhance the processing of agricultural products like rice for instance so that we can reduce our import bill?
Why do we have such a complicated tax exemption system that gives unreasonable tax holidays to foreign companies? Why have article 71 office holders held the whole country to ransom with the illogical benefits that accrue to them? Why do we tax like a poor country with a tax to GDP ratio of about 12% and yet spend like a rich country? It is clear that if we do not work on our trade balance, our currency will continue to depreciate and we will need more cedis to get less dollars to continually import things into this country.
Maybe we ought to amend our electoral system that lends us to elections every other four years to allow for longevity in office so that political leaders can take the hard decisions. Until we change our ways and do the right things which we already know, we may have to keep going back to the IMF and other Britten Woods institutions in a ambulance and the cycle of retrogression will continue.
Let’s change our ways so that we can see change.
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The writer Crispus Ohene Ankomah is a political commentator
Source: Ghana News
