As a researcher, I do respect findings of research works especially coming from reputable institution like Center for Democratic Governance (CDD-Ghana).
However, the recent CDD Afrobarometer findings only indicate lack of understanding of the government’s economic model being pursued.
First of all, it is important for us to remember the circumstances that brought this government into power.
The economy was nearly bankrupt/HIPC after growing at 9.3% in 2008 without oil. With oil, GDP grew by over 14% in the first year of oil export.
Despite increases in oil production after 2011, the economy nose-dived to its lowers in 23years with a GDP growth of 3.6% in 2016.
The declining GDP growth was not the only headache of the new government. The country was in debt trap having its debt increased from GHS9.5 billion (from independence to 2008, 52years) to GHS122 billion in just 8years.
In fact, the last four years of NDC government (2012-2016) accumulated about GHS93 billion making Ghana passed the HIPC threshold of debt to GDP of 73%.
This put government in serious fiscal strain to an extent that three budgetary lines namely wages and salaries, interest payments & amortization and statutory payments consisted 105% of government revenue.
That means that the government had additional 5% to meet the three budgetary items. Capex and other budgetary lines were left at the mercy of God.
Interest servicing alone had moved from GHS389 million in 2008 to about GHS11.0 billion and is expected to hit GHS21 billion in 2020.
In addition, almost every MDA was in debt.
For instance, Energy sector legacy debt of GHS10 billion (US$2.4 billion), NHIS was GHS1.2 billion, Ministry of Roads and Highways was GHS17.8 billion, Cocoa roads was GHC5 billion, GETFUND was over GHC838 million, The District Assembly Common Fund Secretariat was in arrears of three quarters (GHC900 million), outstanding transfer grants, allowances and salary arrears for validated teachers engaged between 2013 to 2016 were outstanding as well as workers Tier 2 pension contributions (GHS3.1billion) since 2010, industries suffered over 3years of Dumsor’ with its accompanying cost implications and cancellation of teachers and nurses trainee allowances.
In the midst of all these challenges, there was an IMF program for which government had to meet certain conditions including freeze on public sector recruitments, cap on how much loans government could contract within a year, Structural benchmark on financial sector stability (banking sector clean-up) among others.
In the midst of these challenges, what were the policy options for government?
The first priority of government was to accelerate the completion of the IMF program which it had to reluctantly extend because; for two years since the start of the program; almost all the benchmarks were not met by end of 2016.
The second was for government to deepen the gains made in bringing an end to dumsor, third was a combination of getting a reprieve for industries and businesses through tax incentives and reduction in electricity tariffs and restoring allowances of Teachers, nurses and Arabic teachers to put money into pockets to engender demand for goods and services to kick start the economy.
Last but not the least, was the general transformational agenda which was to be anchored on the following four thematic areas:
* Macroeconomic stability and debt sustainability
* Infrastructural Development
* Accelerated Industrial Development and
* Agricultural Transformation
Macroeconomic Stability and debt sustainability
There is no doubt that government has been very successful with the management of the economy. Government has met IMF conditionalities and exited the program.
At the macro economical level, GDP growth rate has rebounded with 8.1% in 2017 and average about 7% in the first 3years after recording its lowest growth in 23years with a growth rate of 3.6% in 2016.
Interest rates (15%-24%) considers lowest in 20years, inflation rate of 7.7% in October, 2019 is the second lowest in 6years after September, 2019 figure of 7.6%.
Exchange rate has also seen the lowest depreciation since the last decade recording an average of 8% in the last 3years as compared to an average of 17.7% for the period 2013-2016.
Ghana has for the last 3years been recording trade surpluses of USD $1.19 billion, US$1.78 billion and US$2.6 billion in 2017, 2018 and 2019 (@ August) respectively as against a trade deficit of $1.8 billion in 2016 as in many other years previously.
The economy is also being formalized to reduce the cost of doing business through the adoption of digital technology including digital interoperability, paperless port services, e-procurement, online business registration, e-justice system, digital addressing system, DVLA biometric license, and the National Identification numbers have all been rolled out among others.
Accelerated Industrial Development
Government has initiated industrial development program through several initiatives including but not limited to the following: Shift the focus of economic management from taxation to production. As a result, several taxes were either cancelled or revised downwards.
Government instituted stimulus package of US$50 million to resuscitate viable but struggling local companies/industries as well finance 1D 1F factories for which 181 are at various levels of completion with about 57 of them currently operating.
The expansion of the domestic production of pharmaceuticals with ban on imported medicines that can be produced locally.
Government is also promoting the establishment of a vehicle assembly and automotive industry by both local and international companies. Companies such as Suzuki, Nissan, VW, Sinotruck.
Government since coming to office is said to have procured over 500 vehicles from Kantanka Motors, a local automobile Assembly company as a way motivating the local company ahead of the arrival of the big players, just to highlight few of the initiatives.
Government infrastructural plans are on course with a paradigm shift of over concentration in Accra and Kumasi or the Cities to every constituency.
Every constituency now gets a chunk of the national infrastructural budget through Infrastructure for Poverty Eradication Programme (IPEP) and this is transforming various constituencies and districts.
The road infrastructure is being looked at with government set to invest about GHS3.0 billion cedis in the sector. Currently, several kilometers of roads are being executed.
Government has also started the implementation of the Railway master plan.
Currently, about 1700 kilometers rail lines are being constructed and most of them are on Build, Operate and Transfer (BOT) basis.
Some of the projects include Western Railway Line, Eastern Railway Line, Kumasi-Paga Line (Central Spine), Tema-Mpakadam (Akosombo) Line, Ghana-Burkina Faso Railway Interconnectivity Project and Accra and Kumasi Metro/Light Rail Transit systems.
The Ghana Infrastructure Investment Fund (GIIF) has also been resourced to partner the private sector for infrastructural development
Government modernization of Agriculture sector as well as the development of the entire value-chain is on course.
The roll out of the Planting for food and jobs and as well as Rearing for Food and Jobs has resulted in massive crop and animal production resulting in zero import of grains over the last two years and saving over US$500 million in import bill.
The One Village One Dam policy is to support irrigation farming for all year-round farming.
The Pwalugu multi-purpose dam for which the President cut the sod recently will make available 25,000 hectares of land for farming all year-round when complete.
The recent bumper harvest from the policies above will serve as input for the One Village One Factory policy especially for agro-processing factories. The bumper harvest also led to export of food crops to neighbouring countries.
To reduce post-harvest losses, government has invested in 80 (1000tonnes) capacity warehouses across the country for which 50 will be ready by the end of the year to take care of post-harvest losses.
Government has also established the Ghana Commodity Exchange to link our farmers to the international markets among many policies in the agriculture value-chain.
It is important to understand that government intensions are good but it will take medium to long-term before we can begin to see the fruits of all the policies being implemented today.
This is consistent with economic theory.
There is always a lag period between when a policy is implemented and when the results are seen.
As the saying goes, Rome was not built in a day.
A lot is being done by government and Ghanaians are witnesses to them.
In case, you are not aware, let me refresh your mind a bit. Government has created over 500,000 jobs in both formal and informal jobs albeit, some of them temporarily like NABOC (100,000).
About 181 1D 1F are at various completion points and the jobs to be created through factory workers, suppliers, distributors and retailers will be enormous.
About US$10 billion will be introduced into the economy through the integrated aluminum industry just like the oil we discovered.
There is the massive development in the railway sector, massive roads infrastructure, massive school projects and many others including the Free SHS being implemented.
Next year (2020) will also see the full and visible implementation of the Public Sector Reforms Strategy and ‘Ghana Beyond Aid’ programs among others.
I would like to take this opportunity to appeal to the President and the NPP leadership to take this Afrobarometer report seriously because it is obvious that some people in government and the party are not working.
They are doing showmanship but nothing on the ground.
Others are said to have become snobbish and arrogant causing a lot of disaffection among party faithful which could lead to apathy on Election Day.
This is what the government and the party should seek to work on before the next elections.
Finally, I would like to appeal to Ghanaians to be patient with government as efforts are made to resolve all the legacy issues of arrears. It is obvious there are still challenges in the economy especially with unpaid arrears to contractors and some teachers which is causing a lot of disaffection among some teachers, contractors, their suppliers and the entire value chain.
However, a lot is being done to resolve the challenges.