A turbulent financial storm threatens to decimate Ghana’s economy by the end of the year, reigniting pre-existing sentiments of Ghanaians who have developed ‘little or no’ faith in the government’s ability to help. But policy-makers are in a unique position to restore trust during a critical time in the nation’s history.
Ghana’s economy is on its knees. Exchange rates are sinking. Interest rates are surging. Basic necessities are hitting astronomical prices. Nervous investors have dumped Ghana’s bonds and currency, which is depreciating by the week from intensified concerns about its capability to settle its debts. In an attempt to bring a temporary reprieve, country officials have run to the IMF, asking for US$3billion to stop the bleeding.
Distrust in government has begun to weaken its ability to function and address the specific needs of the people they are intended to serve. To counter this, Ghanaians must feel that its leaders are put in place to support, rather than only serving the interests of the top 10 percent. Creating actionable policies that deliver concrete benefits would be a good start. Côte d’Ivoire was able to do this post-pandemic after creating ambitious public and private investment programmes, which stimulated its GDP. Both the World Bank and IMF praised the country for its economic performance in wake of the pandemic, and the Oxford Business Group considers the francophone country one of the best-performing in sub-Saharan Africa.
As the founder of a non-profit organisation aimed to provide education access for Ghana’s marginalised girls, I cannot count the number of times I am approached asking for basic commodities needed to survive. “I haven’t been able to feed my child,” or “Please spare me something so I can eat this evening” are comments and requests I receive so much so that I’ve become numb to how dire the situation has become.
Inasmuch as I recognise the nation faces developmental and socio-economic challenges, the country still glimmers as one of Africa’s shining stars. I wrote about this two years ago and applauded the nation for expanding its economy with a GDP growth rate of 6.7 percent in 2019’s first quarter alone. Its private sector grew stronger, and local businesses saw significant improvement.
So it was disheartening to witness Ghana’s president Nana Akufo-Addo get booed in Accra when he took the stage at a festival last month powered by Global Citizen, a growing society of activists catalysing a movement to end extreme poverty. His contrived speech about our responsibility – as global citizens – to meet the UN’s Sustainable Development Goals did little to impress Ghanaians who heckled him in what was probably the longest six minutes of his life. Visibly disappointed and embarrassed, the president sauntered off-stage with slumped shoulders as revelers resumed dancing, as if he never appeared at all.
“This is real. The government underestimates the impact of the challenges on the ordinary Ghanaian,” Dr. Godfred Bokpin, one of the nation’s leading economists told me. “Food inflation means more Ghanaians are going to sleep hungry, and the depreciating currency is wiping out their capital.”
Yes, there are external shocks. The devastating impact of COVID-19 and the raging Russia-Ukraine war has created vulnerabilities in Ghana’s economy. But most of what the country faces are direct reflections of failed promises and botched policy measures. As co-authors Daron Acemoglu and James Robinson conclusively disclosed in ‘Why Nations Fail: The Origins of Power, Prosperity, and Poverty’, economic success is spurred by governments holding themselves accountable and being responsive to its citizens. Man-made political and economic institutions are what underlie success.
Ghana can reverse economic trends by implementing groundbreaking initiatives to mobilise economic transformation. Just as important, it must begin to build trust. Trust legitimises actions the government must take and reassures citizens to accept it. When citizens lose hope in their government, policy-making becomes risk-averse and stifles societal unity. If Ghana begins to take action today, its economy could reach ‘upper middle-income status by 2037’, and could become a bastion of stability under a ‘bright horizons’ scenario.
As Ghanaian policy-makers settle back home after convening at this year’s General Assembly of the United Nations in New York, they must begin to rethink how to restore their relationship with their constituencies, and must think through how to provide citizens with the financial and governmental support they need. Leaders in government can no longer keep their heads in the sand about what could become a catastrophic domino effect. Now is the time to step up and produce tangible results before the fiscal famine starves us all.
Zaina Adamu is a policy consultant for the European Council on Foreign Relations and the Global Partnerships chair of Harvard W3D: Women in Defense, Diplomacy and Development.
