Delivering an address at Ashesi University on the topic ‘Transforming an Economy through Digitisation: The Ghana Story’, Vice President of the Republic, Dr. Mahamudu Bawumia, credited the Akufo-Addo government with creating more jobs for Ghanaians than any other Administration since the 1992 Constitution was promulgated. This remark was made without any reference to the exact number of jobs – thus failing to provide a breakdown of the related industries where these jobs have been created and can be found.
As I observe the extent of economic hardship in the country, it is obvious that the Akufo-Addo-Bawumia government has failed in their vision to transform Ghana’s economy, having further exacerbated the levels of poverty, inequality and lowered standards of living for the people of Ghana. In simple terms, this Administration has lacked the necessary growth strategies to deliver meaningful and positive development to the people of Ghana. While digitalisation is good, it does not provide an answer to the widespread economic hardship and mismanagement.
Ghana may return to IMF due to debt trajectory
According to a recent Bloomberg survey, Ghana may have no option than to return to the International Monetary Fund (IMF) for financial support. The debt stock, which is presently a little above GH¢335billion, continues to surge – leading to higher premium if the country returns to the international capital market, as limited access to international loans could force government to supply more debt locally; which could exacerbate economic hardship and growth opportunities. The current poor state of Ghana’s economy is confirmed by global ratings agency Moody’s, which affirmed its negative outlook for Ghana with a B3 long-term issuer ratings.
According to Moody’s, the B3 rating and negative outlook reflect Ghana’s high debt burden that is unlikely to fall within the medium-term. Other major factors include continued weak debt affordability, high gross borrowing requirements and ongoing liquidity challenges in the face of downside economic fallouts. Digitalisation is certainly not an answer to our debt tragedy.
As noted by Prof. John Gatsi, Dean-University of Cape Coast Business School, digitalisation is not a replacement for the provision of potable water, industrial and domestic access to cheaper energy. It’s also not a replacement for debt overhang, fiscal dominance and massive unemployment. Poor housing schemes, low investments in roads, irrigation facilities and continuous income erosion for households cannot be replaced by digitisation or digitalisation.
For an Administration that has received so much and yet delivered so little, this shows how much of a disappointment this government has been. The constant over-reliance on borrowing, especially through the bond market, as a way to engender economic growth and prosperity is reflective of a lazy approach to economic policy management and governance.
State of economy suggests economic contraction and lack of positive development
A careful analysis of the 2021 budget shows that while overall expenditure amounts to GH¢113billion, government’s anticipated revenue target amounts to GH¢72billion – which implies a deficit of some GH¢41billion that has to be borrowed to finance budget expenditure for the year 2021. Out of the GH¢72billion revenue target, the country’s revenue fell short of target by 12% to GH¢34.3billion (US$5.66billion) in the first seven months of the year and may continue to do so, putting pressure on its economic growth outlook.
The shortfall in revenues will thus have a huge impact on the ability of government to service interest payments plus amortisation, pay salaries of public sector workers and undertake capital projects – hence government’s penchant for and resort to excessive borrowing. It is no wonder government is hardly able to undertake major infrastructure projects despite the rhetoric, slogans and vulgar opulence.
Results of poor economic management evident for all to see
For an Administration that touted the years 2020 and 2021 as ‘Year of Roads’ and ‘Second Year of Roads’ respectively, it is surprisingly shocking to see the state of roads, particularly in the capital, in Ghana generally today. This comes at a time when the Roads and Highways Ministry says Ghanaians should be ready to pay more in road tolls to aid the provision of proper road infrastructure in the country.
According to the ministry, this has become necessary as the Road Fund continues to grow lean against the huge need for road infrastructure. It must be noted that government currently owes road contractors about GH¢8billion, with a stated policy of no new award of road contacts – a situation that smacks of irresponsible and sub-standard governance, to say the least.
Also, despite the rhetoric and touting of the Planting for Food and Jobs Programme, available data indicate the Agricultural Sector’s contribution to GDP has seen a downward trend – from 21.48 percent in 2016 to 20.08 percent in 2017, 18.69 percent in 2018, 17.61 percent in 2019, and 18.24 percent in 2020; thus recording an average contribution of 18.66 percent and representing an overall average decline of 2.82, which translates to a decline of 15.11 percent.
Meanwhile, traders and consumers are concerned about the steep rise in food prices per the recent survey conducted by Daily Graphic at markets across the country. This is the abysmal record of the Akufo-Addo – Bawumia-led Administration with respect to the Agricultural sector.
Youth unemployment remains major obstacle to sustainable economic growth prospects
According to the African Development Bank (ADB) report on Jobs for Youth in Africa: Catalysing Youth Opportunities across Africa, of Africa’s nearly 420 million youth aged 15-35, one-third are unemployed and discouraged; another third are vulnerably employed; and only one in six is in wage-employment.
As a result, 263 million young people will lack an economic stake in the system by 2025. There is therefore a need for African leaders – ECOWAS leaders particularly – to be creative and up and doing, as 90% of Africa’s youth live in low and lower-middle income countries with the biggest challenge being lack of formal jobs. What sustainable and major policy interventions have this Administration put in place to address graduate and youth unemployment in Ghana over the past years? These have all been temporary, stop-gap measures; ones which ran contrary to SDG 8, which reads decent work and economic growth.
Is it not intriguing that despite the Administration touting the One District-One Factory Initiative, most youth in Ghana today remain unemployed? Again, from an Administration whose General-Secretary made a firm promise to deliver policies which would lead to the importation of labour due to the creation of increased employment opportunities, is it not intriguing that government officials including the Finance Minister are today urging the youth to venture into entrepreneurship, when no serious investments and plans have been put in place – just like with policies such as the Free SHS, 1D1F and Planting for Food and Jobs initiatives among others.
Furthermore, it is sad to note that NABCO Trainees have been asked to proceed on two weeks leave in order for Management in consultation with the National NABCO Secretariat to plan and strategise on retaining trainees. This smacks of incompetent and abysmal leadership. Considering that the Public Sector is full, as indicated by the Finance Minister, the faith of NABCO personnel across the country hangs in the balance as a result of retrogressive and mediocre policy execution strategies.
In conclusion, it must be noted that the current unemployment challenge, budget deficit and debt unsustainability are simply reflections of the poor economic growth and development strategies being adopted by the Akufo-Addo – Bawumia government.
As indicated by the Head of Finance Department at Valley View University, Dr. Williams Peprah, the time is up for government to overlook public criticisms and go for financial support from the International Monetary Fund to put the fiscal economy in a better shape.
This goes to show the state of affairs for Ghana’s economy under the leadership of President Akufo-Addo and Dr. Mahamudu Bawumia. As noted by Brigadier Joseph Nunoo-Mensah, former National Security Advisor to President John Evans Atta Mills: “I have never seen Ghana as hard as this”. The poor governance, bad leadership and economic mismanagement served the people of Ghana these past five years demand a new economic vision and direction to rescue this country and save it from economic collapse.
>>>The writer is a private legal practitioner, human rights activist, Member of Parliament for Madina Constituency, Member of the Appointments Committee and Deputy Ranking Member of the Constitutional, Legal and Parliamentary Affairs Committee of Parliament, with background expertise in Economics, Conflict, Security and Peace studies. The writer can be contacted via: [email protected] www.madinamp.com