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Op-ed: Akufo-Addo on the ‘Ghanaian economic paradox’

IN this election Ghana is at a crossroads. The current NDC government is throwing away the economic credibility of the nation, and President Mahama’s handling of the economy has raised serious questions that need answers.

Where is the Money?

There should be a lot of money in Ghana, but when we examine the current state of Government finances, study IMF reports or compare ourselves to other ECOWAS countries, the diagnosis is clear – our economy suffers from chronic mismanagement. The proof: Côte d’Ivoire, Sierra Leone and Liberia have all outperformed Ghana in key economic indicators in the past year.

Government borrowing is at an all time high and the NDC regime has been on a debt binge, which will result in a serious economic illness if we continue down this path. Despite more money in the economy than any time since independence, wealth inequality has increased as rising inflation continues to burn holes our pockets.

To put it simply – since our country’s independence, a breathtaking 66 percent of all government debt has occurred under the Mahama regime.

Fig 1: Total debt (GH₵ billions)

Blue: NPP Kufuor - Green: NDC Mills - Red: NDC Mahama
Blue: NPP Kufuor – Green: NDC Mills – Red: NDC Mahama

But we should be experiencing a golden time for our nation.

Prices for our traditional commodities of gold and cocoa are high, and the revenue we should be collecting from Ghanian oil exports should be driving the country beyond our middle income status. At a time where the treasury should be swelling, allowing for increased government spending on social programs, our country has failed to prosper because of total economic mismanagement.

It beggars belief that in a time of plenty, the poorest are becoming poorer and the rich friends of the current administration continue to profit.

Why does it matter that there is so much debt?

When the NDC borrows money from international markets they do so at a rate the market calculates our collective risk to be. Countries with large deposits of oil historically borrow at very low rates, as it is understood by banks and lenders that they will be able to pay their bills when required to do so. Incredibly, the debt-fuelled Mahama government has borrowed so much that international financiers have started to worry about Ghana’s long-term economic prospects. The cost of borrowing is rising, and international faith in Ghana’s economy is heading in the opposite direction.

An example of spending on two identical projects will leave you in no doubt about the government’s mismanagement of our finances. The story of two nearly identical bungalows for the Dambai Teacher Training College illustrates how rotten the system has become. The bungalows are identical, they are next door to each other, designed from the same blueprint and the land is the same. The first was built by the NPP for GH₵ 195,000, the second by the NDC costing GH₵ 900,000. A difference of 460 percent is unexplainable by every normal economic measure, except systemic corruption.

If you leverage huge amounts of debt for infrastructure programmes that rely on corrupt deals, then you are building a house on sand and praying for rain. We must get a handle on public borrowing, it is wildly out of control and this government’s short-term political necessity is blinding them to the economic reality: we are paying more in interest payments on our debt than the total value of all the cocoa, livestock and all other agricultural products we produce.

The NDC could not have been more reckless in their management of the nation’s economy and for the sake of our future we need to take action.

NPP Plan: Agenda for Change

The New Patriotic Party has been championing the rights of ordinary Ghanaians to live and work free from tyranny and oppression since our founding in 1992. Our time in government was marked by economic prosperity and in opposition we have provided a peaceful and constructive check on power.

We in the NPP are fully committed to the stability of Ghana’s democracy. Our country has a unique role in the story of African freedom, and this story is a great source of pride for all of us. Our democracy is an ongoing pursuit which can always be improved and under our stewardship we believe our democracy can flourish through a program of electoral reforms that will ensure a more credible, transparent and stable government.

The programs I wish to fight and I would like my government to pursue are clearly laid out and meticulously costed in our manifesto. We have a rational plan for my government to promote opportunity for all, to heal the division caused by the growing inequality gap and improve our standing in the community of nations.

We are not destined to be a poor nation, we should be a prosperous nation with a high standard of living for everyone. We should be a united nation, where good governance and stable institutions provide a level playing field for all. We deserve an education system that supports our indigenous entrepreneurial spirit and inspires ambition in our youth. We need a competitive economy that rewards hard work and innovation.

We have a comprehensive plan to end the paradox of the Mahama Government. A paradox where the country has more money than ever before, yet the poorest are left behind. A paradox where economic good fortune is weighing down our children with unmanageable debt.

We in the NPP will strive for double digit growth, create new job opportunities and drive down the cost of doing business. We will create an agenda for change that will have a lasting legacy for all Ghanaians.

Nana Akufo-Addo is the flagbearer for the New Patriotic Party, and presidential aspirant for the 2016 election.

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