Economy, A Major Factor In Election 2012
Date published: December 6, 2012
WONDERING where the presidential candidates stand on Ghana’s economic stability and job creation, weak economic growth and stubbornly high unemployment will be key issues as Ghanaians defy the scorching sun to cast their votes on Friday, 7, December, 2012.
80% of Ghanaian voters consider economic issues to be very important in determining on how to cast the ballots. Although the ruling National Democratic Congress (NDC) Presidential candidate, John Dramani Mahama and the main opposition New Patriotic Party (NPP) flagbearer, Nana Addo Dankwa Akufo-Addo and the other candidates made social issues such as education, health, infrastructure, security, corruption and international relations part of their campaign messages.
Like other countries, which rely on the export of primary commodities, Ghana’s economic prospects will be determined by the restoration of growth in the advanced and emerging economies, especially the Eurozone and China.
Indeed, Ghana’s economy has relatively enjoyed macro-economic stability, but this is yet to translate into sound competitive business environment, increases in jobs and poverty reduction levels.
The country is well endowed with natural resources of which agriculture accounts for roughly one-quarter of GDP and employs more than half of the workforce, mainly small landholders.
The services sector also accounts for 50 per cent of Gross Domestic Product (GDP) while gold and cocoa production and individual remittances have become some of the other 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.
The September update of the Composite Index of Economic Activity (CIEA) of the Bank of Ghana (BoG) showed that growth has slowed down in year-on-year terms to 5.4 percent compared with 7.7 percent in June and 21.7 percent recorded a year earlier.
The major contributory components to the slowdown in growth were cement sales, contribution to SSNIT and exports. However, these were mitigated by growth in private sector credit, industrial electricity consumption and port activities.
Provisional estimates of real GDP growth, from Ghana Statistical Service, for the second quarter was 2.5 percent compared to 20.6 percent for the same period of 2011, mainly due to base effects from the addition of oil.
Industry recorded the highest growth of 4.5 percent, followed by Services with 1.6 percent.
Despite a 15 percent growth in the crop subsector, sharp declines in forestry, fishing and livestock resulted in the Agriculture sector contracting by 0.1 percent.
In September, headline inflation declined to 9.4 percent, from 9.5 percent in August. Food inflation remained stable at 4.4 percent, while non-food inflation dipped slightly to 12.4 percent from 12.5 percent in August.
The Consumer Confidence Index improved to 101.1 in September 2012, from 96.5 in July and was driven primarily by improved sentiments on the economy. The Business Confidence Index however softened marginally to 94.3 in September from 95.1 in June 2012.
However, in spite of the drop inflation, prices of goods are skyrocketing since the advent of the Mills-led government.
For instance, a tin of Ideal Milk, which used to be sold at GH¢1.00 in 2011, is now going for GH¢1.50, depicting an increase of Gp5. This is typical of all prices of goods in the West African state. The general rise in the prices of good has brought untold hardship to the people in the country.
The execution of the budget for the first three quarters of the year, therefore, resulted in an overall budget deficit of GH¢5.1 billion (7.3% of GDP), against a target of GH¢4.3 billion (6.2% of GDP).
The excess was mainly accounted for by the implementation of the SSSS and arrears clearance which amounted to 1.1 percent of GDP. During the corresponding period in 2011, the overall budget deficit was equivalent to 1.9 percent of GDP.
Net Domestic Financing of the budget amounted to GH¢4.8 billion, compared to GH¢1.3 billion for the same period last year.
At the end of September 2012, the stock of public debt stood at GH¢29.6 billion (44.7% of GDP), compared with a stock of GH¢23.9 billion (42.6% of GDP) in December 2011.
The domestic component of the total public debt was GH¢17.8 billion compared with GH¢11.8 billion at the end of 2011, while the stock of external debt was US$7.8 billion compared with US$7.6 billion in December 2011.
With public debt consuming about 42.7% of the country’s GDP, Ghana’s economy is nose-diving into the Highly Indebted Poor Country (HIPC) status once again. This is not a joke, but real.
From the look of things, the heavy borrowing spree embarked upon by the Mills administration, with little serious efforts at improving the lives of the ordinary Ghanaian, is a major pointer.
Even in November last year, a Senior Fellow at the Institute of Economic Affairs, Dr. John Kwakye, warned that if care was not taken, the country would join the HIPC again, after coming out from it in 2008.
“While the GDP rebasing has reduced the debt ratio, the high pace of borrowing has attracted some concerns regarding Ghana’s debt sustainability, and the danger of the country returning to HIPC status,” Dr. Kwakye added.
According to the renowned Economist, the only thing the rebasing, which is supposed to have lifted this nation of poor infrastructure and poverty at unprecedented level to the Middle Income, has done, is to paper the cracks of our debt ratio. By the rebasing tactics, the ratio of our debt has moved from 50 percent of GDP to 41 percent.
The managers of the Ghanaian economy would not debate the notion that the only thing significant about the re-basing of our economic indicators was to mask the true state of our economic hopelessness.
Despite the meltdown in the global economy, the Mills-led government was able to contract over US$7 billion, including the US$3 billion Chinese Development Bank (CDB) for the development of gas infrastructure in the Western Region, and other sectors of the economy.
It was recently saturated by the Ghanaian media that the government was sourcing $990 million from the Investment and Commercial Bank of China for rehabilitation works on the Eastern Rail lines; Nsawam to Accra, and Achimota to Tema.
Another $1.95 billion is being sought from the Exim Bank of China for rehabilitation works on the Nsawam to Kumasi rail lines. Whilst the US$1.5 billion STX deal for the construction of houses for the security services and other public sector workers was botched a few months ago.
The Presidential candidates who are leading the pack are using the manifestos of their parties as a social contract between their parties and the people they intend to govern.
MANIFESTOES OF VARIOUS PARTIES
Despite of the different nature of their campaigns, there seem to be key similarities in their messages, which include the creation of jobs for the Ghanaian youth; mechanizing agriculture; ensuring a thriving manufacturing sector; checking corruption, fighting peddlers of narcotic drugs, and also ensuring a much stable economic environment to enable businesses better forecast and plan.
Managing new oil revenue while maintaining fiscal discipline and resisting debt accumulation to improve the lives of the citizenry have been identified as the major challenges the next NDC government will be faced.
In the well embellished NDC’s manifesto, entitled ‘Advancing The Better Ghana Agenda’, the ruling party seeks to renew what it describes as the covenant between the party and the people of Ghana, in pursuance of its common and cherished goal for all.
The party’s manifesto is based on the achievements over the last four years, during which period it established a firm foundation for delivering a programme of economic recovery and sustained welfare for the people of Ghana.
It is based on these pillars that the NDC flagbearer and current occupant of the Osu Castle is asking the good people of Ghana to give him another mandate to complete the Better Ghana.
Under the next NDC administration, it said the party seeks to deepen its economic performance and diversify its economic programmes to provide a basis for the provision of the basic human needs of Ghanaians.
The party’s manifesto stated: “Our governance will be more thoroughly decentralized to enable citizens to access resources and demand accountability for services”.
“Our infrastructure development will be intensified to accelerate the transformation of Ghana into a full middle-income status; Our agriculture will be modernised to involve a strong partnership between private agricultural investors and peasant small-holders in a manner that introduces capital, technology and an expanded local and global market access; and above all our educational assets will be rapidly expanded to provide equitable access for every child to enter and complete basic education, enter and complete secondary school,” it said.
The party believes that the aggregate of all these will enable the economy to expand, creating the needed jobs that will propel prosperity for all “and Advance the Better Ghana Agenda”.
In the area of economy, the party pointed out in its manifesto some specific macro-economic targets which it intends to pursue in the next four years.
This includes an average GDP growth rate of at least eight per cent per annum; A single digit rate of inflation; An overall budget deficit equivalent to five per cent of GDP; and gross international reserves that will cover not less than four months of imports.
Again it mentions that the overall, our economic policies and programmes will aim at the attainment of a per capita income of at least US$2,300 by year 2017.
On job creation which has been a major bane for many governments past and present, the party said activities in the under-mentioned areas will create thousands of jobs.
The document again cited manufacturing and industry as the key elements for job creation and noted that with the anticipated commercial exploitation of crude oil and gas, “we are laying the foundation for an integrated petroleum industry based on bauxite.
A petro-chemical industry based on salt and natural gas; A fertilizer industry to give impetus to agro-development; a salt-based chemical industry for caustic soda; Allied consumer products and exports based on oil and gas; and an integrated iron and steel industry based on the iron ore deposits at Oppon Manso in the Western Region”.
The party believes that cheap gas-fired energy will facilitate the full revival of the following industries – Volta Aluminum Company; Textile industries and ventures in their value chain; Ceramics, brick and tile manufacturing; Glass factories; and steel mills.
In the agricultural sector the party has pledge commitment to expanded the role of the National Service Scheme in food production; distribute 20 million hybrid cocoa seedlings free of charge over the next six years while intensifying and extending the mass spraying exercise to include brushing, pest and disease control, shade management, pollination and fertilization.
For the public sector, the ruling party intends to see to the implementation of a district-focused Public Works Programme under which socio-economic infrastructure projects such as town halls, community centres, district and town libraries, markets and others will be undertaken using labour intensive methods and the full deployment of local building materials while seeing to an accelerated Social Housing Scheme under the Rural Housing and Urban Renewal Programmes.
In the same vain, the job creation programme under the “New Approach to Public Sector Reforms” where the facilitative power of the state will be used to create businesses and jobs in partnership with the private sector.
The party has also resolved to use the construction of roads in many parts of the country as an opportunity from which jobs will be created in the Eastern Corridor, the Western Corridor and the Central Spine.
THE NEW PATRIOTIC PARTY
The 115 paged manifesto of the New Patriotic Party (NPP), the main opposition has a beautiful central theme “Transforming Lives, Transforming Ghana” through building a free, fair and prosperous society.
The party which lost the 2008 elections to the ruling NDC says it is plan to transform all the sectors of the country within four years. The party, whose vice-presidential candidate, Dr Mahamudu Bawumia, is a renowned economist of international repute, once reported to have said that transforming the West African economy will be the topmost priority of the next NPP government.
One of the major cardinal points that the party raised in its manifesto is to transform the economy through job creation.
The party says when given the mandate it will strengthen and resource the National Development Planning Commission (NDPC) and use it as an organ for planning the country’s economic transformation.
The next NPP government, according to the manifesto, will harmonize and regulate all laws on land use planning, provide for sustainable development of land and human settlements through a decentralized planning system, ensure judicious use of land in order to improve quality of life, promote health, safety and regulate national, regional, district and local spatial planning, and generally deal with spatial aspects of socio-economic development.
On industrialization, the party hopes to make a dramatic shift through improving access to quality education, especially in science, technology and research; increasing agricultural production and adding value to our products through agro processing; supporting and promoting our businesses to be export-oriented and globally competitive; supporting and promoting our industries, especially small- and medium scale entrepreneurs and businesses, to be competitive in import substitution and exports; developing and adding value to our natural resources, including oil and gas, salt, gold, bauxite, iron ore, manganese and our agricultural products promoting high-value services; supporting and making Ghana the pharmaceutical manufacturing centre for the region and beyond; developing an aggressive infrastructure programme; focused on value-for-money integrated development planning.
It said the country needs an integrated approach to improving power supply, housing, roads and railways, water irrigation, ports and industrial centres.
The objective and goal of the NPP trade policy is to improve competitiveness in domestic and international markets. The party hopes to implement a trade policy that works for Ghana in creating jobs and is attractive and reassuring to the investor. Government and the private sector will establish a consistent dialogue to identify and address better the needs of our businesses and the economy.
A NPP led government hopes to remove obstacles that prevent cheaper technology acquisition, discourage the importation of capital inputs and limit production and access to markets. You
The party said it believes in the efficacy of the market and therefore its major responsibility will be to empower the private sector to be the driving force in a transformed economy to deliver wealth and jobs. The party hopes to build Ghanaian enterprises to be more competitive on the international market as well as reducing the cost of doing business.
Another major aim of the party according to the manifesto is to achieve a macro-economic stability, create Good Avenue for access to affordable credit to enable to private sector to become the bedrock of the economy.
On strengthening the financial sector, the party intends to implement financial sector reforms which will aim at encouraging savings, deepening the capital market to make affordable long-term finance available to businesses and bringing efficiency in the way Ghanaian transact business.
The party will encourage the setting of credit unions as an alternative to establish banking institutions
On fiscal policy which has been very critical to economic development of the country a NPP lead administration intends to put in measures to ensure that high level of discipline is injected to the management of the public purse.
The party also intends to implement a transparent and comprehensive tax policy that is designed to facilitate economic growth, while also ensuring efficiency, responsibility and accountability government expenditure. In view of this, the NPP will introduce a Fiscal Responsibility Act to enforce the prudent management of the country’s finances.
THE CPP’S ECONOMIC MESSAGE
The Dr. Michael Abu Sakara-led Convention People’s Party (CPP) intends to promote the building of a self-reliant national economy that will be run and managed in the interest of Ghanaians.
Realising the role of the private capital, CPP will promote the vigorous development of the state sector, joint ventures and cooperatives.
The party’s manifesto says it will work to accelerate the fruition of the ideals of a full African economic integration of which ECOWAS is a stepping stone and shall strive to move Ghana away from the role of a raw material produced by the country by encouraging the establishment of secondary industries.
Under a Convention People’s Party, the government and the role of the state will be an active prime mover of growth and development with the objective of meeting the needs and aspirations of all Ghanaians.
WHAT THE PNC SAYS
The main themes of the document are: redirection, rehabilitation, youth empowerment and economic development. The CPP is going into this election with the youngest flagbearer known as Hassan Ayariga.
The 42-page manifesto of the People’s National Convention (PNC) is christened: ‘Service with Honesty is said to represent the national vision and development agenda of the PNC for the people of Ghana if voted into power.
NDUOM’S NEW BABY
A government of the Progressive People’s Party (PPP) led by breakaway candidate, Dr Papa Kwesi Nduom said it remains committed to the development of food crops through modernization and creation of market access.
According to the party cash crops are important as foreign exchange earners and that there would be a big problem if the nation could not feed itself. A PPP led administration therefore intends to depart from the government’s attitude of paying attention to the development of cash crops at the expense of food crops.
PPP wants to use its administration when voted into power to support the private sector to grow and also ensure that all public institutions patronized locally produced food items.
The PPP pledges to create market access for farmers to enable them go the extra mile to produce. The party strongly believes that when a farmer produces there must be a buyer.
The party said Ghanaians are sitting on trillions of dollars in gold, oil, bauxite, iron ore, diamonds and vast tracts of fertile lands that could be harnessed, process and exported and the revenue used to dramatically improve education, healthcare and create jobs for the people.
PPP administration would establish a Women Enterprise Development Agency to train, encourage and promote the growth and development of women entrepreneurs, and also ensure the passage of the Spousal Property Rights Bill if it was not passed before January 7, 2013.
THE UNITED FREEDOM PARTY
For the United Freedom Party (UFP), its leader Mr. Akwasi Addai believes in massive industrialization of Ghana’s economy, as that will lead to the creation of millions of jobs to Ghanaians.
The UFP believes in an agrarian economy to turn the fortune of the country around, as trading in Ghana has become the only sources of business for the Ghanaian businessman. The main interest of the party is to ensure the interest of Ghanaian businesses become a top priority.
THE INDEPENDENT CANDIDATE
The Independent candidate Mr Joseph Osei Yeboah believes that a government under his leadership will expand the rural economy to boost agricultural production.
He noted that his government would enforce laws that would prioritize local interest, especially in commerce to provide leverage for Ghanaians.
The Great Consolidated People’s Party (GCPP), still believes that the issue of domestication is still an issue and, therefore, it is dominating its campaign.
As a result, the party, whose former leader, the late Dan Lartey, became popular because of his ideas on domestication, has titled its manifesto, “Modern Domestication for a Modern Ghana”.
The manifesto as outlined by the flag bearer of the party, Dr. Henry Lartey’s plan to generate three million new jobs by converting Accra into Africa’s first solar city, and establishing Ghana as the continents first sustainable economy.
The GCPP believes that energy is the cornerstone of modern economies and pointed out that the nation is powerless in every sense of the word without reliable sources of energy.
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