By Bernard L. TETTEH-DUMANYA(Dr)
I recently watched Vincent Ekow Assafuah, MP for Old Tafo Constituency, attempt to explain inflation on TV3. Despite the host, Ocansey, providing insightful guidance and educational pointers, the MP seemed reluctant to engage meaningfully or reconsider his stance. This incident reflects a broader challenge in Ghana, where individuals with limited expertise or understanding are often entrusted with managing critical aspects of our economy.
Over the years, and more so with the Akufo Addo-Bawumia administration, we have allowed politicians lacking the necessary depth of knowledge to make pivotal economic decisions. This practice has repeatedly led to poorly conceived policies, exacerbating Ghana’s financial challenges which is prioritizing political expediency over sound economic policymaking.
In contrast, I admire how the Federal Reserve Chairman in the United States navigates complex economic issues. Even under political pressure, the focus remains on implementing policies that serve the best long-term interests of the economy. This approach is a stark reminder of the importance of expertise and principle in economic leadership qualities Ghana urgently needs to embrace if we are to address our ongoing economic struggles effectively.
Ghana’s debt has surged dramatically since independence, particularly under the current administration. Critics argue that much of the borrowing has been channeled into politically motivated projects rather than long-term investments.
A notable example is the Free Senior High School (SHS) policy, which, while beneficial, suffered from a lack of strategic funding due to political sloganeering. This approach has contributed significantly to the nation’s climbing debt-to-GDP ratio, fostering fiscal instability and escalating interest payments that burden the economy.
As the 2024 elections approach, presidential aspirants are once again making grand promises without detailing how they intend to fund these initiatives. The e-levy, a tax on digital transactions, is a stark example of poorly planned policy-making. Its implementation faced widespread criticism for inadequate stakeholder consultation and unrealistic revenue projections.
One of the key challenges lies in the failure of citizens and the media to hold politicians accountable. In Ghana, media outlets often fail to interrogate policies robustly, with some resorting to bootlicking rather than asking tough questions. This contrasts with the approach in the U.S., where moderators in debates, such as during Kamala Harris and Donald Trump’s confrontation, challenge falsehoods to ensure clarity. Ghanaian politicians frequently make economic decisions without adequate expertise, driven by structural and cultural governance issues.
Many prioritize short-term political gains over long-term sustainability, resulting in decisions like tax breaks and subsidies that lack fiscal prudence. Their limited understanding of macroeconomic principles such as inflation control, exchange rate stabilization, and debt sustainability often becomes evident when they speak eloquently but fail to demonstrate competence in economic management. For example, the inability of some parties, notably the NPP members to grasp the nuances of a 24-hour economy policy is striking.
Any economist would recognize how this policy could leverage the Growth Model G=β0+β1⋅T+ϵ and Productivity Model (P)=α⋅(K/L) which can be used to project extended business hours as businesses operate more efficiently and labor markets adjust to new working patterns.
Also, Urban economics further provides tools like Spatial Equilibrium (Pi)=αi⋅Xi+ϵi techniques and Accessibility Model: Ai=γ⋅Di that may help improve lighting, expand public transport routes, or better zoning to facilitate seamless economic operations throughout the day and night. These basic economics have eluded some of these politicians or their unwillingness to accept something that is technically feasible.
As Ghana prepares for elections, the next administration must prioritize inclusivity by involving experts, not just party loyalists, in decision-making. Economic policies should shift from being centralized around political leadership to relying on technical expertise for more informed and sustainable decisions. Strong accountability mechanisms are also essential to deter leaders from making reckless choices without consequences.
Ghana has a wealth of capable individuals who, if empowered, could steer the country toward meaningful development. I suggest the next government must prioritize appointing individuals who have been tested and proven capable, with the tenacity to lift Ghana’s economy from its current depths not merely those with impressive credentials.
It is disappointing to hear figures like Dr. Bawumia who was once heralded as an economic savior, suggest we must grant him power to become president before he can reverse policies such as the e-levy and other nuisance taxes that have burdened citizens even so he remains head of the economy team.
This contradiction is ironic, considering his role in creating the very economic challenges he now promises to resolve. The next administration must prioritize not just financial or economic expertise but also entrepreneurial acumen.
Leaders with innovative and practical approaches are essential to develop policies and projects that are realistic, impactful, and sustainable. It is important to note that, when politicians make uninformed decisions that fail to ensure economic stability, public trust in governance erodes, weakening the social contract and undermining government legitimacy.
However, citizens share some responsibility for this state of affairs. Voters often prioritize charisma and party loyalty over competence, perpetuating ineffective governance. This lack of civic pressure for accountability in economic decision-making stems from limited public understanding of economic issues and a lack of tools to demand better governance.
To address these challenges, the next government must:
- Strengthen economic literacy among political leaders and voters to ensure informed decisions and electoral choices.
- Empower technocrats to play a leading role in policy formulation, allowing experts to guide economic planning.
- Establish robust accountability mechanisms to scrutinize economic policies and decisions, holding leaders to high standards of transparency and effectiveness.
Citizens must become more vocal in demanding competent leadership, and the media must rise above partisanship to provide critical, unbiased scrutiny of government actions. By fostering expertise, innovation, and accountability, Ghana can break the cycle of political mismanagement and create a foundation for sustainable economic growth.
>>>the writer is a seasoned Financial Economist & Consultant with an illustrious career spanning 29 years across academic, corporate, and agribusiness sectors. His extensive professional journey includes pivotal roles at esteemed institutions such as UBA Ghana, SIC Financial Services, Empretec Ghana, and the Swiss International Finance Group, reflecting his profound understanding of global finance. Renowned as a pioneer in risk management, compliance, and corporate strategy, Dr. Tetteh-Dumanya has made significant contributions to the Ghanaian financial landscape. He has been instrumental in spearheading initiatives in Venture Capital, business/financial reengineering, and fundraising, thereby playing a pivotal role in the growth and development of numerous entities. Driven by a fervent dedication to capacity development, Dr. Tetteh-Dumanya has offered consultancy services to a diverse array of local and multinational organizations notably GIZ, AGRA, SNV, DANIDA, and USAID among others. His expertise in financial and business domains is multifaceted, showcased through his adept navigation of complex challenges and his commitment to driving sustainable growth in every endeavor. For inquiries, Dr. Tetteh-Dumanya can be reached at: [email protected]
