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What’s Left with Nana Akufo-Addo?
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- Created on Tuesday, 15 April 2014 00:00
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What’s Left with Nana Akufo-Addo?
COMMENT: “Facing facts? Salmond mulls the future after a 'no' vote”; and “Government to introduce progressively free Seniour High School (SHS) Education,” says President John Mahama
COMMENTARY
On Thursday, 27 February 2014, Ian Dunt, captured this heading on the politics.co.uk: “Facing facts? Salmond mulls the future after a 'no' vote”. This relates to the 18th September 2014 crucial referendum on Scottish’s independence from Britain, for which a day before that report, Alex Salmon- the Scottish first minister, is said to have openly contemplated his future in the event of a 'no' vote in the Scottish referendum, which suggests the first sign that his faith in his ability to win the vote may be lagging. Current polls put the 'yes' camp 12-points behind, yet the first minister states he remained confident of winning- insisting that he would continue to fight for another referendum even if he loses this one, too.
“Will I continue to argue and espouse the case of Scottish independence? Yes, of course I will,” he said. “I've said on the record on many occasions that my view is that referendums are once in a generation opportunity. “But if you are asking if I will be deflected in my belief that Scottish independence is the right way forward for the people of this country, then of course not.” The report credited Salmond with a calling on Scottish nationalists online to refrain from using aggressive language when engaging in the debate. The comments, according to the politics.co.uk report, came after David Bowie's official Facebook page, as Ian puts, was inundated with abuse after he called for Scotland to “stay with us”. In that week; Ghana witnessed intense political cross-fires from the ruling NDC and the main opposition NPP followers over the free SHS feasibility debate- which clouded most of the country’s concerns in 2012. Ever since the free SHS aspiration resurfaced with the President’s recent State of the Nation Address, many have described it as the second coup d’état against Nana Akufo-Addo’s presidential fortunes. Nana Addo’s central themes on wishing to be voted President of the Republic of Ghana are:
Transformation of what he describes as Guiggisberg Economy and the introduction Free SHS. But on Tuesday, 25 February 2014, President John Dramani Mahama while addressing the Ghanaian Parliament shot this dream down as the preserve of the main opposition NPP, stating that his ruling NDC Government, in consultation with the Ministry of Education, had prepared a roadmap for the progressive introduction of free secondary education in Ghana as required by the Constitution. President John Mahama also hinted the abolishing of fees in Day Senior High Schools by 2015/1016 academic year. Myjoyonline writes: “Free SHS was the signature campaign promise of the Presidential Candidate of the opposition New Patriotic Party- Nana Addo Dankwa Akufo-Addo in the 2012 presidential election. “The promise was viscerally attacked by the governing National Democratic Congress as unrealistic and deceptive and designed to win votes. The President in response to the NPP’s campaign said he would build 200 community-based day senior high schools and improve access to secondary education. After that, he promised, government would make secondary school education progressively free.”
In response to such accusations; President John Mahama, in the words of GNA, told his audience in the Central Region that: "When I was presenting the State of the Nation Address to Parliament, I said we will implement 'progressive free education’ and my checks at the Copyright offices indicate that no one has the intellectual property of free education.” But radioxyzonline quotes Political Strategist- Dr Kobby Mensah, as saying that the main opposition NPP owns the free SHS because it was idea on which the 2012 elections was fought and that the NDC’s intention to implement the policy strengthens the NPP’s earlier justification for it. He accordingly advises the main opposition NPP to pursue the same message in the 2016 elections and leave the electorate to judge rather than abandoning the whole idea.
The ongoing fierce debate reflects the Ghana’s traditional woes- two legs good and four legs bad omens- predicted in our earlier article: “Why Mahama Must Accept the Free SHS Now?” Similar to the Ghana’s Independence struggles, two main strategies emerged- those of “Independence Now” as against that school of thought which held that “independence should be aspired “in the shortest possible time.” Heavens broke loose over this and it became a cliché that “if you are not with us then, you are our foe”. Accordingly, the very brighter promises that independence held for the Gold Coast, evaporated into uncompromising opposition and political dictatorship that metastasized into coups and counter-coups.
Today, similar to the early post-independence days in Ghana’s, opposing political forces are at each other’s throat on radios, print and online media, insisting not only that the Mahama-led Government cannot be trusted with an unblemished implementation of the free SHS policy but also, are engaged with all sorts of name-callings and counter-accusations on a very crucial dream whose realization is long overdue. But who is to be blamed for this? Thinking that politics is a contest of ideas that seek to advance the living standards of the peoples, in its broadest sense, Heywood(2003) argues that it is the activity through which people make, preserve and amend the general rules under which they live. “As such, politics is inextricably linked to the phenomena of conflict and cooperation. On the one hand, the existence of rival opinions, different wants, competing needs or opposing interests guarantees disagreement about the rules under which people live. On the other hand, people recognise that in order to influence these rules or ensure that they are upheld, they must work with others,” Heywood writes.
But working with others in good faith had always been the pitfalls of the Ghanaian politician. This is why the heart of the politics which in the words of Heywood, is often portrayed as a process of conflict-resolution, in which rival views or competing interests are reconciled with one another had been missing in all Ghana’s political attempts even today. However, politics, it is said, in this broad sense is better thought of as a search for conflict-resolution than as its achievement, since not all conflicts are- or can be - resolved. Thus so long as we remain as human beings, we shall certainly, have our differences on the basis of history, our upbringing and various beliefs. Respect, must therefore, always be the reminder. Ghana’s political landscape is littered with unrefined vocabularies and unsubstantiated allegations all in attempt to outwit our political opponents. Achieving post-electoral reconciliation, trust, goodwill, knowledge-sharing and recognition had been as distant and difficult as the Spanish War of secession.
Which is why in their efforts to gain independence and probably, not to muddy existing cordiality thereafter, similar treatment is said to have been dished out by Salmond, to Olympic medalist Chris Hoy and Scottish comedian Susan Calman. The concerns here are the excesses that pop-up on the internet. "I would make the appeal that everyone participating in this debate should be conscious that we want to have a debate which is worthy of the importance of the decisions which are being made." "All of us know it's a function almost of the internet when people are participating in perhaps the early hours of the morning, that they don't choose their language as they would often in a public forum ... or when they were in conversation.” Nana Akufo-Addo is currently not a presidential candidate and little could be predicted whether or not the NPP national delegates might return him back to mainstream politics.
I personally don’t know Nana Akufo-Addo. But while in the United Kingdom for political and religious vacation to ponder over his political future, every effort to have a word from him here in London before this comment was written had been unsuccessful. So I’m unable to forecast what is actually left with his political future. But Nana Akufo-Addo, who recently asked that John Mahama must be prayed for to succeed as a president, might have advised his sympathizers when debating on matters relating to SHS. Salmond had told the Scotts folks: “I think everyone has an obligation to raise their game – whether it's online, offline, in a public forum. I think we should talk about the big issues facing the country and we should talk about them in a way which obviously engenders sparky, lively debate, but we should do it in a way which brings credit to the country and to the importance of the issue we’re debating.”
According to Dunt, Salmond- the first minister had previously been criticised for failing to challenge the overly-aggressive behaviour by online Scottish nationalists, who are sometimes referred to as 'Cyber Nats'. But the John Mahama NDC-led free SHS policy might uncompromisingly, also encounter this: “Lee Ocran mocks School Heads; if Gh¢1.80 is insufficient, try Free SHS’ test. On 21 November 2012, the then Education Minister Lee Ocran, was quoted to have mocked head teachers who said the feeding fee being charged is insufficient and could affect the quality of food given to students. “If Gh¢1.80 is insufficient and could lead to poor quality of food to students, then what will the quality be like if it is free as the NPP is proposing under its free SHS policy?" Myjoyonline reported that the Minister gave a directive for the school heads to desist from charging Gh¢2.50 as feeding fee and revert to the Gh¢1.80.
The contest between Government and the Conference of Heads of Assisted Secondary Schools (CHASS) over the Gh¢1.80 which in the quoted words from the Myjoy report, was said to be woefully inadequate and therefore, predestined to poor quality of food, raised this submission from the former Education Minister Lee Ocran: “I see, that is very interesting,” he said, laughing, “You know some people don’t want to pay at all. This one, they are paying and the headmasters are complaining that what they are paying will affect the quality of meal. If it were free, what will the quality be like?” in that episode, The Minister was quoted to have added: “It is time for heads of second cycle institutions to speak up against the NPP free SHS promise if they think the quality of education will be compromised. In its report: “Free SHS Will Cover Boarding Students – Prez Mahama” GNA writes that President John Dramani Mahama on Friday renewed government’s commitment to abolish fees for both day and boarding students of SHS in the 2015/2016 academic year. Details of this bid are yet to be unfolded.
But Professor Jeanne Naana Opoku-Agyeman- the current Education Minister and once an IEA Debate Provost may be considering paraphrasing this from her predecessor: “People are paying and yet they are complaining about the quality of meals. What happens if you don’t pay at all? Because after all we are paying subsidies to supplement what they are paying.” The NAGRAT and GNAT- leading stakeholders in the country’s education, have also registered their opposition to the “progressively free SHS. Which stakeholders then, is the Government in consultation with? The Free SHS policy in Ghana is becoming like the Scottish Independence Referendum debate. In UK, the Standard Life- a savings and investments company- offering a range of long-term savings, pension and investment products, designed to help its customers save for their future and with almost 4 million people in UK, has become the first major employer to say it might move its operations into England if Scotland votes for independence.
On the basis of the 2012 election result, we assume that Nana Akufo-Adoo, lost the Referendum on the Free SHS because of the deplorable educational infrastructure and the hard economic realities which appear not to have drastically, changed. So the NPP might politically, not want to return to its Waterloo if Nana Akufo-Addo were to succeed in his considered bid to lead the party for the third attempt. He might therefore, have to scrutinize other hidden constitutional provisions which indisputably, spark not only hope but also outsmarts President John Dramani Mahama’s projected Free SHS to be piloted in 2015. Our hearts would have of course gone to the plight of the street mental health patients which Dr Kwadwo Osei states it is being now addressed, not forgetting clean water, education & training and policies that seek to preserve the environment and the ecology. But these ones too, seemed to have been politically evaporated. President Mahama’s recent visit to Eastern Region aboard helicopter states so.
What, then, do you think is left with Nana Akufo-Addo where from bottom-up, delegates overhaul its executives and presidential hopeful- John Alan Kwadwo Kyeremateng, asserts with optimism that the accession of his perceived disciple to his political kingdom- Mr. Paul Afoko, on the NPP’s chairmanship throne, “signals the coming change”? In his interview with Oman FM Sasu Manu in Tamale, dated 12 April 2014, Alan spoke about a wide range of issues including a simmering propaganda within the NPP notwithstanding the yearnings for his presidency everywhere he did go. He also made mention of the political concession in the night of 23 December 2007, at Legon Hall, to Nana Akufo-Addo, who he describes a senior brother. On that day, Nana Akufo-Addo was elected as the NPP's 2008 presidential candidate at the NPP congress with 47.96% (1,096 votes) of valid votes. This was below the legally mandated 50% +1 vote, to lead the party. We mention in passing that with 738 valid votes count under his sleeves- representing some 30+ %, Alan, could have hinted a shot but bowed to Nana Akufo-Addo.
This came at the heels of some two-hour suspended voting which originated from the accusation that the said Paul Afoko and the newly-elected NPP National Chairman, whose recent bid, generated various hues and cries, was allegedly, distributing money to influence delegates to vote for Alan Kyeremateng. Delegate Afoko disputed this accusation alleged to have been orchestrated by the then NPP National Organiser- Lord Commey, who without a shred of evidence submitted that voting rules had been compromised. Disbanded Afoko was accordingly, escorted off the congress grounds distributing dollars and it is still unclear whether that allegation was revisited when he recently availed himself for vetting. Political dynamics are unpredictable and indeed for seconds. So it is not surprising that Afoko is now NPP’s internal elections front-man, capable of achieving everything relating to NPP’s ideological goals. In 2007 fracas, Joy News correspondent, Evans Mensah, quoted the current NPP chair, as saying that he Paul Afoko had only visited the gents when some delegates and aspirant Kwabena Agyei Agyapong- the recently-elected NPP General-Secretary, accosted him and accused him of distributing money (dollars).
The acrimonies that followed had well been documented. But from journalistic interest it must be reminded that although Nana Addo triumphed over some 17 contestants and went on to secure 49.77% vote in the first hurdle, he stumble below the 50+1% vote, prompting a penalty shoot-out where J.E. A. Mills-led NDC narrowly-won with 50.23% out of the 9,094,364 total valid votes cast. In the 2010 expanded (130,000) delegates, Nana Addo had 83,361 (77.92%) of the valid votes cast. His immediate competitor was Alan Kyeremateng, had 21,820 votes (20.40%). The rest are as follows: Isaac Osei: 1,109 (1.04%); Professor Frimpong-Boateng: 398 (0.37%) and Rev Kwame Koduah: 294 (0.27%). Yet the perceived unflinching support and solidarity of his able and trusted Bawumia, Jake Obetsebi-Lamptey and Kwadwo Owusu-Afriyie, in December 2012, Nana Akufo-Addo had 5,263,286 (47.74%) as against John Mahama’s 5,573,572 (50.70%). The EC’s disputed total valid vote cast was 10,995,262.
Alan, including of course, other NPP presidential hopefuls seem to suggest that they have the key to unlock the some 3% electoral treasures that have arguably, consistently eluded the NPP and therefore, must be given the chance. But like Salmond & Co’s Scottish Independence advocacy, another puzzling question that begs for answer is: “What is Left with Nana Akufo-Addo’s 70%+ NPP delegates’ base?” In 2010, Alan scored a distant 20%+: any increase of the same in 2014, must be a worry to Nana Addo.
JusticeGhana
No commentsTamale, Here We Come
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- Created on Monday, 14 April 2014 00:00
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Tamale, Here We Come
With Paul Afoko, Freddy Blay, Kwabena Agyepong, John Boadu, Sammy Awuku etc etc.
It is normally not my style to make my views on aspirants in any NPP contest public, particularly using this column. I have, most of the time, used interpersonal communication methods to convince delegates to vote for particular candidates in such contests both at the Constituency, Regional and National levels. This year, I decided to break that policy for what it is worth. As the immediate past First Vice Chairman of the NPP in the Western Region, I decided not to seek re-election so I can help remove the then Chairman whose incompetence was and may be still is phenomenal. Western Region is the better for it now.
It is very sad but real that the NPP, as it stands today, is mentally divided into Alan Kyerematen and Nana Addo camps; an unfortunate situation which emanated from the 2007 primaries for the flagbearership for the 2008 general elections. We have denied this on many platforms and at the least opportunity available to us because physically and numerically, the NPP remains the biggest political party in this country. The fact is that the support by party members for one leader or the other is not too deep-seated to affect our fortunes as a political party as the two last elections showed, even though we did not win power.
The mental division exists about a perceived threat that one’s position in the party may affect the support for a particular candidate or the other in future elections. This thought has created a situation which has negatively affected the selection and election of party members even at the grassroots level. The consideration is whether the person is an Alan person or Nana Addo person. Before I go further, let me declare my assets in respect of loyalty and support for the two personalities I have mentioned above. I am a dyed-in-the-wool Nana Addo supporter, but I do not support incompetent supporters of Nana Addo to hold party positions at any level just because they support Nana Addo.
As I was saying, the elections at the Constituency levels have been bedevilled by who is loyal to whom when it comes to the flagbearership race. It is also a fact that those elections have been influenced through financing from across the ‘borders’ of the constituencies just to ensure that those who can be counted upon to win the elections and throw their support for us ‘when it comes to our turn’. Similar situations occur during the regional elections and up to the national elections. Competence, understanding and appreciation of the task of party executives at all levels are subsumed by consideration of who will ensure our victories at later internal elections.
Invariably, some people find themselves elected or selected to certain positions for some of the stated reasons just for them to relapse into inaction and inactivity when it comes to the real work which will ensure the total victory of the party. This is the truth that needs to be told as we cruise to the beautiful city of Tamale. How can we be talking about unity when the selection and election of party officials to manage and run the party for elections are based on who supports which flagbearer for general elections? Such a situation gives room for the election of incompetent officers who are just there to ‘protect’ an individual even when they do not add anything good in the interest of the individual they claim they so much love.
Let us face it, the flagbearer of the NPP did not lose the last two elections, it is the managers of those elections who did not help the party to win the elections. The election figures are there for us to see, in the two elections in our recent past, the flagbearer performed far better than all the Parliamentary candidates. Apart from the very laudable and vote catching promises and manifesto of the party, what strategies did we go into the elections with? I am not sure that if we elect a competent group of people who may not agree with a particular flagbearer, those party leaders will use their competence to get the party to lose the elections? We can no longer replace loyalty alone for competence and efficiency.
In any case, a good leader is the one who can get even his opponents to do what he wants them to do to achieve a stated goal. A good leader is able to turn his adversaries into loyal compatriots for the good of all. This Congress should not be about Alan or Nana Addo, it should be about people who will offer the best strategies and managerial abilities with persuasive skills and language to get even our political opponents who are equally seething under the incompetent John Mahama administration to vote for us for a better life.
Paul Afoko should be the chairman, with Freddy Blay as the Ist Vice Chairman, John Boadu as the Organiser, Sammy Awuku as the Youth Organiser, you can add to them from the rest and I can bet that victory will be ours in 2016 with Nana Addo as the flagbearer. Unity can best be achieved in the party when we blend the varying opinions in the party to achieve the final object of victory. Any attempt to sideline others on the basis of loyalty to another will not bring all the talents we have for the victory ahead of us. That is the only time the much touted unity would have been actualized.
See me for your mahogany bitters, limited stock so it will be on the basis of the early bird catching the worm. Welcome to Tamale.
Source: Kwesi Biney
Alan confident of NPP 2016 victory
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Alan confident of NPP 2016 victory
A leading member and a two-time flag bearer aspirant of the New Patriotic Party, Mr Alan Kwadjo Kyeremanten, has said the ability of any political party to win elections lies in how it chooses its own leaders.
In this regard, he says the New Patriotic Party (NPP) has every reason to be proud of what it has achieved so far in organising “what is considered by independent and objective political analysts to be free, fair and transparent elections to select party officials at the polling station, constituency and regional levels.”
Sharing his general reflection on the conduct of elections in an exclusive interview with the Daily Graphic, the 2016 presidential hopeful of the NPP expressed the conviction that “this record will hopefully not be undermined, but rather reinforced in the process of selecting parliamentary candidates and a flag bearer for the party in due course.”
He made this assessment against the backdrop that the composition of the NPP’s current Electoral College and the processes for internal elections could be considered as one of the most comprehensive and broad-based political models to have been introduced not only in the political history of Ghana but the whole of Africa.
Key message
In his key message to delegates to the National Conference to be held in Tamale on April 12,2014, he encouraged all delegates and party members to work together to ensure that the NPP would come out of the conference more united than ever before; that the party would eventually emerge as winner and not individual contestants.
He, however, said that would not happen by chance, but would required that party officials and other accredited delegates to the conference would jointly and severally conduct themselves, both in speech and action, in a manner that would not prejudice the outcome of the elections.
In his view, the contest must be about selecting candidates who could organise and manage the party to return it to power in 2016 rather than serving the selfish interests of individuals and interest groups within the party. He insists that “the focus must be on building a strong, united party with a common purpose and vision.”
He further pointed out that talking about unity must not be a mere rhetorical exercise undertaken by party leaders and other officials, but must be backed by concrete action.
NPP winning power in 2016?
On what it will take for the NPP to win political power in 2016, Mr Kyeremanten postulated a number of factors, including the need to review the two successive election defeats.
“There has to be a comprehensive and dispassionate analysis of why we are currently not in power and by commitment to the core principles of democratic governance, our belief in the rule of law, our belief in the sanctity of the Constitution of Ghana and the basic tenets of our jurisprudence in protecting the rights of individuals, ensuring accountability of institutions of state, as well as checking the abuse of political power by government,” he stressed.
Although the Supreme Court did not rule in the NPP’s favour, Mr Kyeremanten said “there is absolutely no doubt that we made a strong and compelling case and I believe that posterity will be the final arbiter of the validity or otherwise of our judicial claims.”
In addition, he pointed out that the NPP flag bearer for the 2012 General Election, Nana Addo Dankwa Akufo Addo,was right in making a public declaration of the acceptance of the court’s ruling, while expressing in no uncertain terms his dissatisfaction with the final ruling of his Lordships. “This is a further reflection of the deep and abiding faith that our great party has in defending the principle of due process in the resolution of electoral disputes,” he stated.
He, however, indicated that the NPP must now move forward beyond the court case and undertake a more comprehensive analysis and introspection of other factors that might have contributed to the party’s defeat.
Among other things, he calleld on the party as a matter of urgency to review its campaign structure and organisation as well as preparations for general elections and demand accountability for results from the leadership of the party and campaign officials.
“The propaganda about the party having lost the 2012 General Election because Alan Kyerematen or other specific leading members of the party did not support the campaign is not only false but vicious and a cover up for those who should be taking responsibility for their acts and omissions in not ensuring victory for the party” he declared.
He said the review exercise must lead to major internal reforms, including how to mobilise grass root support for election campaign, such as voter registration and ensuring optimal voter turn-out; selecting, preparing and motivating polling agents for Election D-Day activities, dealing substantively with party internal conflicts without bias and favour, particularly in the run up to the selection of parliamentary candidates.
He also called on the party to conduct an objective analysis of the Ghanaian voter psychology to gain an understanding of why Ghanaians vote the way they do in the selection of their leaders in presidential elections.
“This should not be seen as a subjective or negative exercise but rather as a proactive and strategic effort by the party to groom and promote candidates who can attract independent voters beyond NPP’s core constituency and deliver victory for the party.
Source: Daily Graphic/Ghana
NPP's mode of electing national executives is flawed - Dr. Amoako Baah
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NPP's mode of electing national executives is flawed - Dr. Amoako Baah
{sidebar id=10 align=right}The Head of Political Science Department of the Kwame Nkrumah University of Science and Technology has charged the newly elected national chairman of the NPP to change the current mode of electing the party's executives, especially the chairman.
The NPP currently elects its national executives through a simple majority system, but Dr. Amoako Baah told host of Joy FM’s Super Morning Show, Kojo Yankson, that the approach is flawed because it leads to the absurd situation where a winner of a position may actually not have received the majority of votes cast at an election.
For instance, Paul Afoko polled 2,032 votes out of a total of 4,733 to beat three others to the chairmanship position. His closest challenger Stephen Ntim had 1,500 votes. Fred Oware followed with 1,135 votes. Jake Obetsebi-Lamptey who was the incumbent could only manage 66 votes.
Dr. Baah says it is a difficult task for a winner who obtained less than 50% of valid votes cast to rally the rest of the team for a cause even though he was certain Mr. Afoko would reach out to the vanquished.
He also cited the women's organizer position which was fiercely contested between Otiko Djaba and Tina Mensah. Otiko won by a slim majority, she polled 276 votes whilst Tina Mensah polled 250. Mawusi Awity came third with 113 votes.
Not getting 50 percent plus one indicates that more than half of the delegates at the conference are not in support of Mr Afoko's chairmanship, the political science lecturer explained.
“The problem is this, those who did not vote for him are more than those who voted for him, which means, in effect, he does not enjoy the majority support of the members of the delegates who went there to vote; it is not a good thing,” he observed.
The two candidates with the highest votes should have been made to go for runoff if they want the winner to enjoy the support of the majority, he recommended.
He said, “It is better for the election mechanism to give you the support you need, than for you to go and ask for it, that is the difference.”
Dr. Amoako Baah has therefore advised the NPP to adopt a different approach in electing its executive.
“Now as chairman, it means it is part of his responsibility to see to it that, that part of the rules are changed, so that next time around it is not just the person who got the most votes but the person who got the majority of the votes, which is 50% plus,” he said.
In his view, the NPP went into the 2012 election with a divided front. One person does not win an election, he said, adding that the party must unite if it wants to win power.
Dr. Amoako Baah also said the election of Paul Afoko would go a long way to neutralise the propaganda that the NPP is an Akan party.
The Electoral Commission is yet to declare the results of the NPP election; however, provisional figures indicates that the New Executives of the NPP are as follows:
Source: Myjoyonline.com | Isaac Essel | This email address is being protected from spambots. You need JavaScript enabled to view it.
The Ghana’s Irresistible Borrowings
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The Ghana’s Irresistible Borrowings
Think About It: ‘We don’t borrow to buy drinks and food’ – Mahama to critics, Citifm, 27 March 2014.
ABSTRACT
Debt Crisis: “By the end of 1990 the world’s poor and developing countries owed more than $1.3 trillion to industrialized countries. Among the largest problem debtors were Brazil ($116 billion), Mexico ($97 billion), and Argentina ($61 billion). Of the total developing-country debt, roughly half is owed to private creditors, mainly commercial banks. The rest consists of obligations to international lending organizations such as the International Monetary Fund (IMF) and the World Bank, and to governments and government agencies: export-import banks, for example. Of the private bank debt, the bulk has been incurred by middle-income countries, especially in Latin America. The world's poorest countries, mostly in Africa and South Asia, were never able to borrow substantial sums from the private sector and most of their debts are to the IMF, World Bank, and other governments…The loan pyramid came crashing down in August 1982, when the Mexican government suddenly found itself unable to roll over its private debts (that is, borrow new funds to replace loans that were due) and was unprepared to quickly shift gears from being a net borrower to a net repayer… Though experts do not really understand why the crisis started precisely when it did, its basic causes are clear. The sharp rise in world interest rates in the early eighties greatly increased the interest burden on debtor countries because most of their borrowings were indexed to short-term interest rates. At the same time, export receipts of developing countries suffered as commodity prices began to fall, reversing their rise of the seventies. More generally, sluggish growth in the industrialized countries made debt servicing much more difficult.” [1]
Research, Information & Advocacy
It is not always true that irresistible huge borrowings shall bring infrastructural development to Africa and in this context Ghana, as President John Mahama had said. So far we are yet to be lectured or told about this African success story and here, on its decades of borrowings track records. Economically, most African countries such as Ghana, relies on the exploitation and export of natural commodities such as gold, diamond and oil, not forgetting agriculture production- farming and livestock. Although Ghana’s services sector; according to Index Mundi [2], accounts for some 50% of its Gross Domestic Product (GDP), it could be argued that it faces enormous challenges, making it difficult for governments to meet its projected annual targets due to bribery and corruption, tax evasion or under-performance.
Indeed Index Mundi also notes that Ghana's economy has been strengthened by a quarter century of relatively sound management, a competitive business environment, and sustained reductions in poverty levels; it is observed that President Mahama faces challenges in managing new oil revenue while maintaining fiscal discipline and resisting debt accumulation. “Ghana is well-endowed with natural resources and agriculture accounts for roughly one-quarter of GDP and employs more than half of the workforce, mainly small landholders. Gold and cocoa production and individual remittances are major sources of foreign exchange. Oil production at Ghana's offshore Jubilee field began in mid-December, 2010, and is expected to boost economic growth. Estimated oil reserves have jumped to almost 700 million barrels.” [2] Yet the recent production falls in cocoa and more importantly gold, adding to the laying-off a sizeable number of workforce in Anglo-Gold Ashanti, support Ghana’s uncertain revenue.
Thus as a third world or developing country such as ours, we might have every good intentions for borrowing to speed up our developmental deficits- both human and infrastructural. But the argument that the richer nations- such as the G8(7)- namely, Canada, France, Germany, Italy, Japan, Russia, United Kingdom and the United States, proceeded on the foundations of excessive borrowing calls for further investigation and appraisal if that was our measure. How could we comfortably compare hardware or a metal manufacturing country such as the Obama’s United States to a perishable or raw material producing country such as Republic of Ghana? The fundamentals of US’ tax base even makes this incomparable let alone the rewards and royalties of decades of US’ investments in research and development (R&D). The sidelines of poverty in Brazil and Argentina vitiate a further debate on this.
Michael Kelbaugh writes this about US’ debt: “As the national debt approaches $16.4 trillion, it is worth reminding ourselves why that debt should give us cause for concern. Government spending itself can be harmful because it crowds out private investment, redirecting resources to projects that are designed more for political than economic benefit. But the debt itself -- outlays in excess of receipts -- has consequences beyond that of even a “responsible” level of spending, since it represents payments that future generations will have to make. By racking up debt today, we are imposing a burden on our children.” Keynesians object arguing that debt does not hurt future generations, provided that “we owe it to ourselves.” Dean Baker states “As a country we cannot impose huge debt burdens on our children [since] the ownership of our debt will be passed on to our children. If we have some huge thousand trillion dollar debt that is owed to our children, then how have we imposed a burden on them?” The reasoning seems valid. Even if our children have to pay off our debt at a future time, they will only be paying it to other Americans. Thus, that generation will, on net, be no poorer because of the debt created by their parents. The debt merely causes a transfer of resources from taxpayers to bondholders. [3]
Yet Citifm Richard Mensah quotes President Mahama as saying [4]: “There are some who claim Ghana is borrowing too much and that it is increasing the nation’s debt, but I dare say if you borrow and use it prudently you are on the right course and that is what is important…government does not borrow money to use on drinks and food, we use the money to provide potable water and electricity to various communities.” So we provide below the background to threats of debt crisis culled from Internationalist Magazine for further analyses and on Ghana’s current debt, borrowings and vulnerable national revenue:
THE THIRD WORLD DEBT CRISIS
What is the Third World Debt Crisis?
How did it start?
Why does the debt keep growing?
What can we do?
Many developing countries have very large debts, and the amount of money they owe is quickly increasing. Trying to pay off the debt (debt service) has become a serious problem for these countries, and it causes great hardship for their people. Take the region of Sub-Saharan Africa, for example. This region pays $10 billion every year in debt service. That is about 4 times as much money as the countries in the region spend on health care and education.
How did the Debt Crisis start? At the end of the '70's, many oil-exporting countries had large amounts of extra money. They put this money into Western banks. The banks then loaned a lot of money to Third World countries for big development projects. However, several factors (a rise in world interest rates, a global recession, and low commodity prices) caused the size of these debts to start growing very fast; several countries began to fall behind in their payments.
The amount of money owed by developing countries has increased dramatically since the early 1980's. These countries now owe money to commercial banks and also to organisations like the World Bank, the International Monetary Fund, and to First World governments. Why does the debt keep growing? It is especially difficult for developing countries to repay loans: Loans must almost always be paid in hard currency. Most loans to the Third World have to be repaid in hard currencies. Hard currencies are stable currencies; that means their value does not change very much. The Japanese yen, the American dollar and the Swiss franc are examples of hard currencies.
Developing countries have soft currencies - they go down in value. Therefore, when the value of a developing country's money goes down (as it often does), the cost of its debt rises. It takes more of the country's own currency to pay back the same amount of hard currency. The value of a country's exports goes down. The value of the commodities that a Third World country exports can go down by large amounts. This makes it much more difficult for the country to repay its loans. In Latin America, for example, debt is growing faster than earnings from exports.
Refinancing loans can get countries into even more troubles: Refinancing is when more money is borrowed to pay off earlier loans. In theory, refinancing is a measure to help developing countries with their debt problems and sometimes it does this. However, it does not make good sense to take on new debts in order to service existing debts. If this happens, the result is that countries get deeper and deeper into debt. (This is called a 'debt spiral.') In addition, many of the loans to developing countries are made by governments or organisations like the IMF. These loans often carry strict conditions with them, like cuts in spending on health care, education and food subsidies. This makes life even worse for people in the indebted countries. What can be done?
Reschedule the debts:
This is when the terms of repaying the loan are changed and more time is allowed to repay the loan.
Debt swaps:
Some organisations have thought of clever ways to help developing countries lessen their debts.
UNICEF's Debt for Child Relief is an example of how an organization helped some developing countries with debt problems.
In this program, UNICEF and international banks made a deal. Some of the money that poor countries owed the banks was not paid to the banks but was paid to UNICEF. Instead of the money, the banks received tax deductions. UNICEF collected the debt repayments in local currency (not hard currency) and then spent this money for programmes to help children inside the country.
Cancel the debts: Quite simply, the debts would no longer exist. The developing countries would not have to repay the loans and they would not have to pay the interest. After all, what do the developing countries really owe the developed world? They have repaid their loans many times over in interest payments. In addition, in many cases, developing countries have paid the First World more (in debt-servicing) than the Northern countries have given in aid, loans and investment.
From 1983-1989 a surplus of $165 billion went FROM countries receiving aid TO the countries who were 'giving' it. Again in 1994, the less developed countries paid out $112 billion more than they received. Of course, cancelling Third World debts now will not solve the problem in the future. To do that, we must change the present financial system, which is based on debt and interest payments; a system that keeps control in the hands of those who are rich and powerful.
Information comes from the article, 'Currencies of Desire', by Vanessa Baird (NI October 1998) and The A to Z of World Development (1998) edited by Wayne Ellwood (New Internationalist Publications Ltd)
Culled/Copyright: New Internationalist Magazine 1998, 1999
On that note, it is worth reproducing what has been said about the concerns of US’ domestic borrowings: “Yes, the projects that the present generation’s government chooses to finance, even while racking up a debt, might have a lasting value that compensates future generations by providing them with the fruits of a long-term investment they could not otherwise have, such as infrastructure or domestic oil production. But the guardian angels of the state are not very adept at selecting such services, even less so when decisions are made with the resources but without the consent of the unborn. Borrowing, then, remains the most politically feasible option for the government to finance its spending. Taxation will always be unpopular, and inflation makes its presence felt eventually. Borrowing the money, however, conveniently passes the bill to future generations- who will never realize that they have been cheated and robbed if we keep repeating the meaningless myth that we owe the debt to ourselves.” [3]
CONCLUSION
Our summary advocacy therefore, is: we must be very cautious in our debt-bondage and spending for we are just but natural or agricultural producing country, relying heavily on the mercies of God and nature, and arguably less capable not only in managing our own energy needs but also seasonal bumper harvest.
Researched and Compiled By Asante Fordjour for The OmanbaPa Research Group
JusticeGhana
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LEGENDS
GLOBAL: Worldwide
A RECESSION is a time when there is much less business than usual.
A COMMODITY is a product of farming, forestry, or mining that is bought and sold.
DRAMATICALLY: very greatly.
DEBT SERVICE: The amount of borrowed money and interest that you must regularly pay.
References
[1] Kenneth Rogoff (1991), “The Third World Debt Crisis”, http://www.econlib.org/library/Enc1/ThirdWorldDebt.html, date accessed, 29 March 2014
[2]Index Mundi, “Ghana Economy Profile 2013”, http://www.indexmundi.com/ghana/economy_profile.html, date accessed, 29 March 2014
[3] Michael Kelbaugh, “Debt and Future Generations”, http://www.americanthinker.com/2012/12/debt_and_future_generations.html, 29December 2012, accessed 29 March 2014
[4] Richard Mensah ‘We don’t borrow to buy drinks and food’ – Mahama to critics, http://www.citifmonline.com/?p=8964, 27 March 2014, accessed, 29 March 2014
[5] What is the Third World Debt Crisis? http://newint.org/easier-english/money/debt.html, date accessed, 29 March 2014