At 61 Ghana needs a new economic paradigm

Every year, as Ghanaians mark what has become a routine flag-raising independence celebration, one question keeps begging for an answer – how truly independent is Ghana?

Perhaps the closest we have come to answering this question is the sudden discovery by President Akufo-Addo that something needs to be done about Ghana’s economic underachievement and our continuous dependence on aid for financing our development budget.

In a little over one year in office, President Akufo-Addo has been very consistent in advocating for a paradigm-shift in Africa’s development trajectory. Small wonder that the 61st Independence of Ghana was celebrated under the theme ‘Moving Ghana Beyond Aid’.  

This new economic paradigm has won for President Akufo-Addo international accolades as the emerging voice for Africa; but there are those who think that the ‘Moving Ghana Beyond Aid’ agenda may yet pass as another empty slogan, just like Kwame Nkrumah’s “the Black man is capable of managing his own affairs”.

 We are already behind time

I have heard some critics of President Akufo-Addo challenging him to give timelines to his ‘Moving Ghana Beyond Aid’ agenda. Those calling for timelines have perhaps lost touch with reality. The fact is that we are several decades behind our peers, and I personally wish we could attain economic self-sufficiency next year.

The President highlighted the urgency of the situation when he recounted that around the time of our independence Ghana was at par, if not ahead of our peers like Malaysia, South Korea and Singapore. According him the per capita incomes of Ghana, Malaysia, Singapore and South Korea were similar at around US$450 in 1960, and our economies were dependent on the production of primary commodities.

Today, those countries of Malaysia, Singapore and South Korea have significantly transformed themselves into industrialised economies while Ghana is chasing their shadows. Income per head in Singapore is now at US$51,431, South Korea at US$29,115, and Malaysia at US$9,623 compared to Ghana’s US $1,512.  In the President’s view, Ghana’s economic decline over the years is attributable to our continuous dependence on the export of primary commodities.

Thus, the President’s adoption of ‘Moving Ghana beyond aid’, is an admission of the fact that we cannot continue on the path of economic underachievement. “The only nation we are destined to become is the one we decide to be. We do not have to accept someone’s definition of Africa or Ghana. We must define and craft our own destiny,” says the President.

Mindset change

What I am sensing from the President’s stance is that there is need for all Ghanaians  to embrace a mindset change. It has been proved in other contexts that development starts with an internal change of attitude. The expectation is that when people are empowered to embrace change, hopefully they will take their destinies into their own hands and steer their own development.

As the President noted, ‘Moving Ghana Beyond Aid’ will require that we break from a mentality of dependency and adopt a confident, can-do spirit, fuelled by patriotism.  “We cannot subordinate the common good to build a prosperous nation for the selfish interests of a few. Indeed, the most rapid cases of economic and social transformations in history – those in South-East Asia – spanned a period of about 30 years; about a generation. We cannot wait that long; we have wasted enough time already. It is time to get on with it, and the time is now.”

According to the President, the only way we can reverse our destiny is through a deliberate and qualitative change in all aspects of our lives; especially in the structure of our economy, the nature of our infrastructure, the education of our young people, the acquisition of skills – and, above all, changing our attitudes and holding firm to our distinct values.

In fact, and as President Akufo-Addo noted, Ghana has been overly dependent on aid for decades. Fortunately or unfortunately, there is now ‘aid fatigue’; that is, donors are tired with our begging mentality. And President Akufo-Addo couldn’t have put it better when he explained that if even donor countries and other charitable organisations are willing to give all they have, there will never be enough aid to bring Ghana to the status of a developed nation.

Natural resources

That Ghana is well-endowed with many natural resources like gold, bauxite, iron ore, diamonds, oil, natural gas, timber, cocoa, water, fertile land is indisputable. The sad twist is that Ghana has never benefitted from its natural resources and endowments.  “Poverty continues to be our lot. Mismanagement, corruption and high fiscal deficits have become the hallmarks of our economy, which we finance through borrowing and foreign aid,” according to the President.

The President talked avidly about effectively harnessing our natural resources, and deploying them creatively for rapid economic and social transformation.  In the area of sustainable development, President Akufo-Addo explained that ‘Moving Ghana Beyond Aid’ means ensuring that future generations have a healthy environment to inherit. This calls for using all means to protect our environment and water-bodies from illegal and uncontrolled mining and logging. “We have to win that fight to keep our environment clean and protect our heritage for our descendants.”

Corruption

On his favourite topic of Corruption, President Akufo-Addo said the stealing of public funds continues to hold back the development of Ghana.  He recalled that a recent audit of the Ministries, Departments and Agencies by the Auditor General, Mr. Daniel Yaw Domelevo, led to the disallowance of some GH¢5.4billion in fictitious claims, adding that the GH¢5.4billion could certainly finance Free Senior Secondary School (SHS) for five years. This colossal money would have gone into private pockets but for the vigilance of the Auditor General. In addition, by reversing the popular ‘sole resourcing’ procurement policy of the previous government, some GH¢800million was saved in 2017 alone. This bold step alone, if sustained, can strengthen public finances and save a lot of money for development.

Perhaps one piece of good news is the President’s commitment to pass the Right to Information bill.  He said, it would increase transparency and add another critical weapon to the armoury in the fight against corruption. “After many years of hesitation, we intend to bring the bill again to Parliament, and work to get it passed into law before the end of this Meeting of Parliament.”

Truly, this RTI bill has survived three governments – the Rawlings, Kufour and Mills-Mahama Administrations – which all promised and failed to deliver the bill. This is the second time I am hearing this government promise to pass the RTI bill. Earlier in 2017 the Information Minister, Mr. Mustapha Hamid, promised that the Akufo-Addo Administration would deliver the bill within its first mandate. The year has passed and there’s no sign of that happening.

Now that I have heard it from the horse’s own mouth, however, I am optimistic that the RTI will materialise. If anyone wants the President to commit to any timeline, it should be on the RTI. It is not only critical for good governance; it is an indicator of transparency, openness and sound economic management. It was during President Akufo-Addo’s tenure as Attorney-General that aspects of the Criminal Libel laws were repealed to deepen free press and freedom of expression. So, as President, he can only add to his record as promoter of the people’s voice by passing the RTI into law.

Good signals

In launching Ghana’s third economic update last week, the World Bank disclosed that Ghana’s economy had witnessed a steady growth from four percent GDP in 2016 to around eight percent at the end of 2017. This was corroborated by President Akufo-Addo, when he indicated that Ghana’s economy grew from 3.6% in 2016 (the lowest in 22 years) to 7.9% in 2017; and is this year expected to grow at 8.3%. This anticipated growth could perhaps make Ghana the fastest-growing economy in Africa, all things being equal.

The President underscored the fact that a disciplined macro-economy is essential for prudent economic management that creates jobs. In the 2008 budget statement, government outlined an elaborate job-creation strategy in the public sector, beginning with the recruitment of 100,000 young men and women in the Nation Builders Corp.

Realistically, what could augment the ‘Moving Ghana Beyond Aid’ agenda is rapid growth of private sector – and with it the creation of jobs in industry and agriculture. For instance, government’s ‘Planting for Food and Jobs’ has been cited by the World Bank as a good policy creating rural sector jobs.

Adding value to our exports

More than ever, Ghana needs to depart from exporting primary commodities like cocoa, gold, bauxite, manganese and oil in their raw state as a first step to weaning ourselves from foreign aid. Due to the export of raw cocoa beans, farmers for example get less than 10% of the value of a bar of chocolate – yet cocoa is the main ingredient. It therefor makes every economic sense to add value to our commodities. The President explains that on the world market bauxite in its raw form is worth about US$42 per metric tonne. Processing it just one stage further into alumina oxide and refining the alumina oxide into alumina will increase the value by seven times.

Perhaps, this is the right time to establish an integrated bauxite industry, which has been on the cards since independence. Thankfully, the President said work on the law establishing an Integrated Bauxite and Aluminium Development Authority is advancing, and will be submitted to Parliament very shortly.

Government also hopes to reach an agreement soon with potential partners to establish an alumina refinery, and to expand the VALCO smelter. A successful execution of this project will boost the exploitation of iron ore and manganese deposits in order to make Ghana the centre of a steel industry in West Africa.

What happens after eight years?

For me, the biggest threat to Ghana’s economic transformation is lack of a consistent national development vision. The other threat is the unwillingness of new governments to continue with the development agenda of previous governments. We easily destroy what others have built, because we want to have our own way – even if our way will reverse the clock of economic progress. And that is the difference between Africa, Europe and Asia. They have national policies that build on what other governments have started. Out of greed and covetousness, we are grabbing everything in sight without thinking about future generations.

While I am highly optimistic that Ghana can depend less on foreign aid and donations for development in the future, I am somewhat uncertain about the fate of this new agenda after the end of an Akufo-Addo tenure. Perhaps this is the time for the electorate to consider retaining a party in power beyond eight years; rather than the current practice of voting governments out after eight years. A government with an inclusive and farsighted development agenda should be retained in power to lay a solid foundation for economic transformation. Of course, any government that messes up should be quickly shown the exit after four years.

Economic development is not about “chop, make I chop”. It is about leaving a lasting legacy, whose fruits will be enjoyed by future generations.

(***The writer is a Development and Communications Management Specialist, and a Social Justice Advocate.  All views expressed in this article are my personal views and do not represent those of any organisation(s). (Email: safoamos@gmail.com. Mobiles: 0202642504/ 0243327586/0264327586)