Crispus Ohene Ankomah: Does Ghana need constant foreign guidance for economic growth and sustainability?

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The consequences of the elections in Ghana are austerity. You see all kinds of industrial action and picketing to send a message to the highest levels of political authority. The reason is simple. Political parties break banks to win elections.

They provide benefits under the guise of social intervention and protection, which greatly increases the financial burden on the government whose citizens have to bear the brunt of the introduction of new taxes and tax increases.

The 7th Legislature saw the need to pass a Fiscal Responsibility Act to prevent the government from spending above the 5% threshold, but unfortunately we were unable to accommodate this due to a pandemic.

The electoral commission has a duty to check the finances of political parties, but it simply would not do so. It is necessary to develop a protection mechanism for our public funds. Until we do that, the incumbent will continue to break banks to win elections and we will continue to remain in this atavistic quagmire of regression.

The question is posed, however, ‘Does Ghana need constant foreign guidance for economic growth and sustainability?’ Yeah, I think we do and it looks like the Blackman isn’t able to run his own business the way Nkrumah envisioned. Why am I saying this?

For 17 good times, Ghana clung to the claws of the IMF for balance of payments support, to be able to absorb external pressure and generate internal revenue for public sector financing and capital expenditure. From the perspective, whenever Ghana has been with the IMF, there has been consistent financial discipline, reduction in corruption and an upward spiral in economic indicators like growth rate and debt levels.

Reference is made to more recent history when in 2014 Ghana entered into an IMF Extended Credit Facility Program which the newly constituted NPP government inherited. During the first term of the government led by Nana Akufo-Addo, economic figures were on a positive upward spiral.

The growth rate was 7% single-digit inflation and the debt-to-GDP ratio was around 60%. As soon as we left the IMF program in 2019, things started to deteriorate to the point where we have a budget deficit of around 14%. I fully agree that COVID-19 has played a part in the erosion that has occurred, but it can be said forcefully that immediately we left the IMF program, we threw away financial prudence and discipline to dogs.

I and the many like-minded people believe that Ghana Beyond Aid is highly achievable given the overwhelming presence of renewable natural resources in our country, but for over six decades different governments have touted different aphorisms all of which have ended in a aggressive pursuit of foreign support rather than maximization of local natural resources for economic growth.

Unfortunately, in 2022 Ghana had to re-enter an IMF program and borrow at preferential rates to be able to improve our balance of payments needs and the result will be that the IMF will have to take a hard look at government spending. Discretionary spending will need to be drastically reduced and government intervention in its major social programs like Free SHS could be halted to ensure proper ownership of our financial resources. Can we continue on this path? No, we can’t.

It is time for our leaders to apply the many things we learned in social studies at SHS and history in college for economic growth and development. These things have become repetitive like platitudes and like Presby’s hymns sung in praise of God.

Why can’t we add value to our natural resources like cocoa? Why do we have gold when we get the least return from this mineral? Why do we have Tema oil refinery but can’t process crude? Why do we import almost everything in this country? Have we thought of equipping the Association of Ghanaian Industries to strengthen the processing of agricultural products such as rice, for example, in order to reduce our import bill?

Why do we have such a complicated tax exemption system that grants unreasonable tax exemptions to foreign companies? Why did those responsible for Section 71 ransom the whole country with the illogical benefits that are rightfully theirs? Why do we tax like a poor country with a tax to GDP ratio of about 12% and spend like a rich country? It is clear that if we do not work on our trade balance, our currency will continue to depreciate and we will need more cedis to get less dollars to continually import things into this country.

Perhaps we should change our electoral system that lends us to elections every four years to allow for longevity in power so political leaders can make the tough decisions. Until we change our ways and do the right things we already know, we may have to keep going back to the IMF and other Britten Woods institutions in an ambulance and the cycle of regression will continue .

Let’s change our ways so we can see the change.

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Writer Crispus Ohene Ankomah is a political commentator

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