Nana Yaa Ofori Atta

Nana Addo Dankwa Akufo-Addo is fluent in 2 European languages; English and French.  A useful skill, given that Ghana is surrounded by Francophone countries on 3 sides (La Cote d’Ivoire, Togo and Burkina Faso) and faced on its coastline, by the unforgiving Atlantic sea. We are also a nation, much divided by inherent and deliberate snowflake opportunism.

In his second State of the Nation (SONA) address to Parliament delivered in on Thursday, February 8th, 2018, President Akufo-Addo, also displayed his prowess in local languages.  He provided a proverb in the Ewe language, spoken by the people’s of the Volta Region – not Akufo-Addo’s native tongue. “Nu veve la, wo dane le eze veve me.” Repeated twice, for effect.  Translated into English, it apparently means ‘that which is important, you cook in an important pot.’. 

Top Line

This SONA was an exercise in multitasking coded messages nuanced to manage both the domestic audience as well as the international investors that Ghana assiduously and is now strategically seeking.

Economic growth up from 3.6% in December 2016 to 7.9%.  Forecasts from the World Bank are optimistic, 8% growth and above in 2018.  International reserves are up; exchange rate stability largely achieved; GDP to debt ratio reduced  from a high of 36% to 13.6% means that the ratio stock of public debt as a measure of GDP has declined from 73% at the end of of December 2016 to 68.3% by September 2017, even better than the target of 71%.

Akufo-Addo spoke with confidence to the remarkable turnaround in the powering of Ghana’s perennially underperforming industrial output, up from -0.5% in December 2016 to 17.7% on the back of stabilising the supply of hitherto erratic power, known locally as ‘dumsor’. 

To the cries of a boisterous Parliament, he said “we have paid almost half of arrears accumulated over 6 years and we are current on obligations to statutory funds.”  The President cited some Ghc3.1 billion of arrears in pension funds paid – this might explain why there were no industrial strikes during his first year in office.  Further, the 3 year IMF extended credit facility, $900 million contracted in humiliating deep crises by the former administration, will come to a conclusive end in 2018.

Restoration of allowances for trainee teachers and nurses, implementation of free secondary school education resulting in the entrance of some 90,000 students previously unable to muster up fees and thus left out.  He didn’t say say it, but quietly, maintaining prices paid to farmers in spite of the dip in global cocoa prices has come at a considerable cost to the exchequer.  Ghanaians and international investors like these numbers and want much more.

To access opportunities that result in technology and knowledge transfer, the development of viable domestic value chains to industrialise ‘Ghana Beyond Aid’ and large scale imports, is a case of the chicken and egg.  We must have both.  

History in Living Colour

Death in exile for Dr. Kwame Nkrumah and Professor Busia (leaders of the First and Second Republics), followed by the public execution after summary military trials of Generals Afrifa, Acheampong and Akuffo – former military Heads of State – by the junta led by the boomerang man, Flt. Lieutenant Jerry John Rawlings.  Dr. Hilla Liman led the Third Republic and died at home, prematurely out of office.  Professor John Evans Atta Mills, third leader in the 4th Republic also died.  He was still in office, dispatched under still mysterious circumstances.

In Parliament on Thursday was the sum of Ghana’s intertwined political economy.  Former President John Agyekum Kufuor, the NPP’s first President seated during the live address by Akufo-Addo (he served Kufuor first as Attorney General then as Foreign Minister) next to the man he succeeded, former President Jerry Rawlings, Founder of the now Minority NDC and his wife, Nana Konadu Agyeman-Rawlings.  She too has tried and failed twice for the top job.   On the other side of Kufuor sat former President John Mahama and his Vice President (VP), Paa Kwesi Amissah Arthur.  The import of the SONA recap must have made for uncomfortable listening for some.

Facts Behind the Figures

In the small but bold print of Akufo-Addo’s address, should domestic audiences and international investors care to pay attention was the way forward.

Ghana’s recovery within a remarkable year has been delivered on the back of 2 things.  A bounce back in global demand and thus prices for oil – the country is a new entrant in this field.  Austere Presbyterian fiscal discipline and the confidence generated not in small part, by the administration’s public desire to ‘protect the public purse’.  

The current Auditor-General, Daniel Yaw Domelevo has identified and stopped payment with ongoing retrievals as well as imminent prosecutions, of some Ghc5.4 billion (Usd1.2 billion) of publicly funded contracts awarded in 2016.  Domelevo says either the contracts did not exist, can not be proven by documentary evidence, were inflated or had already been paid.  Akufo-Addo mined the legacy governance deficit of Mahama to announce a savings of Ghc800 million (almost $200 million), made by an average 50% standing down sole sourcing and restricted tenders for public contracts.   He said No savings were made in the last year of the Mahama administration, in spite of an above 90% approval for both categories of contracts awarded.

The Way Forward

By delivering in a year, 19% returns in dollar terms, the Ghana Stock Exchange has been lauded by Bloomberg as the world’s best performing exchange.  There are 36 stocks listed on the main GSE exchange, another 4 on the secondary exchange.  Market capitalisation remains modest in global terms, Ghc64.2 billion, approximately $14.6 billion.  To keep ahead, Ghana’s capital market will require a deepening of its liquidity to fend off external headwinds.  Akufo-Addo’s government may well be considering plans to list shares of lucrative State Owned Enterprises.  This is where investors should look sharp.

Step 2

The President deliberately touched on the prospect of the impending confirmation required by Parliament of the first Special Prosector to investigate cases of corruption by public officials.  That and the efforts of the Auditor General to disallow and surcharge dubious public debts will play extremely well locally.  For international investors, this administration’s ability to progress further in governance, including reform of the Investment Law with strategic protection of local content particularly in manufacturing; while powering up reforms in the business enabling environment to impact the country’s annual Doing Business scores as well as reforming public financial accounting systems are required.

Step 3

Investment in Infrastructure, Education and Technology to create jobs, a value chain and sustain growth will require private participation. Railways, roads, aviation, agriculture including fisheries, IT and sanitation were specifically cited. This is where the leaning forward will apparently take place.  It is significant that in the SONA, Akufo-Addo singled out the Ministers who superintend these strategic areas.   

Cooking in 14 days

In the quiet corridors of Parliament, away from the now ubiquitous weekly press conferences that the Minority insists on holding, impotently demanding resignations in 14 days, realpolitik.  Advances in hard governance matters such as confirming Martin Amidu as Special Prosecutor will likely unearth the freshly buried skeletons of the NDC.  Further, every success by this government sounds a death knell for the Minority’s 2020 ambitions.

With more than 100 Ministers and their Deputies, slacking is not an option for the governing NPP.  A Cabinet reshuffle to rightsize by merging best performers would be extremely well received.

This President must leverage his party’s majority with effective time bound delivery to keep the large and increasingly not silent middle class, the youth and the vulnerable on side whilst courting sustainable foreign direct investment.  The sum of their efforts must lead to jobs for qualified Ghanaians.

That which is important, you cook in an important pot.

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