Ghana reigns

If you have not heard of Ghana’s fast progress, you might be the only one. Dubbed as the second strongest economy in Africa, Ghana boasts of being one of the more stable countries in a land where political unrest reigns. Since Ghana transitioned to multi-party democracy, it has been free to establish its democracy which is a continuation of Ghana’s strong history paying homage to the fact that it is the first African country to achieve independence since 1957 from British colonial rule. The export of Gold and Cocoa have helped boost Ghana’s economic development as well as combined with the production of crude oil. This step towards honing their natural resources and exporting them has allowed for a trade surplus which showed in Ghana’s GDP as a jump from 2.8% in 2018 to an impressive 3.8%. But this figure does not reflect in Ghana’s GDP for 2019 which remained at 3.1% the same as Ghana’s GDP for 2018. This allows Ghana’s economy to attract FDI, but the rising economic growth does diminish the large fiscal deficit faced by the economy. 

This can be seen from the alarming jump from 62.76% national debt in relation to GDP in 2019 to 76.67% in 2020 (International Monetary Fund 2020). There are many factors and traps that are responsible for the underdevelopment of African countries such as Ghana. One of two of the major traps that are responsible for the underdevelopment of Ghana is the natural resource trap and bad governance trap. Aside from the conflict trap available in Ghana the natural resource trap is one of the biggest catalyst two undermining Ghana’s development. Ghana is a land that is rich in natural resources, but this does not automatically translate into growth and development for the country. wealth in oil and gold like in Ghana’s case may lead to poor economic performance and unbalanced growth as well as conflict and political unrest. Cocoa, timber, diamonds, bauxite. and manganese were also major sources of foreign exchange earnings for Ghana, but this did not help Ghana from falling into one of the biggest traps that stop the development of a country commonly known as the “Resource Curse”. 

Even though the resource curse is largely dependent on the institutional policies and transparency of the government it is easy for Ghana to be vulnerable to this curse due to poor governance. The issue remains that country that is dependent on only the natural resources for financial and face political problems and slow growth. In the case of Ghana, the financial gains derived from these natural resources find themselves in the hands of the ruling elite of the country whose aim is to get richer and not invest in the betterment and development of the country. This allows the rich to get richer while the poor get poorer since the elite does not allow this money to leave their hands and the lower class remain deprived of any opportunities for development and betterment. To come on top of the highly competitive electoral system the diversion of revenues from minerals have always been reallocated to Chiefs that ensured the stability of the ruling coalitions instead of benefiting the country and the social-economic development of the country. This is done by the political elite to ensure votes from rural areas and avoid resistance from smaller groups and pay off feudal Lords. 

This allowed the ruling elites to maintain power and be safe from any opposition. By allocating revenues from the mineral royalties to the Chiefs they ensure stability for the rule and do not support any opposing party against them. All of this is done to maintain the social and political status quo time ensures that there is control over the rural population and any thought of resistance is squashed at its root. Policies such as the extractive industries transparency initiative do not prevent the misuse of royalties from natural resources instead are often used as a cover to pay off Chiefs and ruling coalitions. 
 
The second trap responsible for destroying Ghana’s development and growth is bad governance which essentially means start corrupt politicians rule the country and stop any hope of development and betterment for the country instead they seek to keep their power but any means necessary even if it means selling out their own country just to retain power. Poor Governance allows the rich to avoid taxes and ensure that the ruling elite remains in power with the poor always remaining suppressed. Countries have a track record of corrupt politics that hindered the development of the country and Ghana is no exception to this. Political institutions in Ghana have always favoured corruption since those politicians preferred by the ruling elite make their way into power and pave the way for more corruption for the ruling elite as discussed above. The poor are deprived of their voice because politics is just a rich man’s game. 

In countries such as Ghana, firms go underground to hide from the burden of bureaucracy and brighten the way to avoid paying taxes and obtaining illegal certifications that allowed them to do their business and poor governance like this only leads Ghana into a pit where development and betterment is not an achievable thing. After colonization, the people in power in Ghana were not interested in the development of the country and preferred getting tax, a practice that was preferred by the people in power after Ghana’s independence who found it easier to extort taxes from the people at a lower rate to keep the people of the country happy and not work towards developing the country. Corruption and bad governance not only threaten the development of the country but also threatens the security of the country. $2.3 billion is lost true corruption in Ghana where citizens have to bribe their way to access government services like public healthcare and certifications. The security of the country is threatened when practices of corruption lead to underdevelopment of the country which leads to fewer job opportunities and a low per capita income leading its citizens to revolt and succumb to unfavourable practices to put food on the table for their families. The traps are responsible for affecting Ghana’s growth and development and unless there are kept in check there is no hope for development in the country. 
 
Ghana’s external debt for 2019 was at a 15.55% increase from 2018, a staggering figure that shines a light on the crumbling economy despite it being a fast-progressing economy (Ahsan 2020). The reality remains ha 75% of Ghana’s export base is based on is gold, oil, and cocoa exports and due to COVID-19 the increased low world commodity prices and export restrictions, there has been extra pressure on the country’s external and fiscal accounts. 

Ghana’s issue remains that its dependence on relying on oil for export does not open up the opportunity for the production of different jobs and this is not taking into account the environmental concerns that arise from only exporting and producing oil. The insurgency in northern Ghana is a result of poor policies regarding the development of the economy, which is worsening. With garners focus on only oil production do non-oil economy is headed towards failure but credit must be given where it is due. Ghana’s president, Nana Akufo-Addo and his New Patriotic Party (NPP) has made it their goal to spread awareness of the dangers of depending only on oil production and export and emphasize the need for new policies which encourage development and export to further Ghana’s economy and stabilize it. The government has placed great emphasis on making sure that the overall economy does not become entirely dependent on oil and the government is working on transforming this economy to make sure it includes other revenues but the entire change in the structure of the economy is not a quick process and requires time for transformation.

The industrialization of the non-oil economy is being done by the government with its new program dubbed as NIRP or more commonly known as the National Industrialization Revitalization Program in which the government is giving financial assistance to 60 struggling companies in areas of manufacturing and textiles. The government has chosen this budget to help revive the private sector growth, but the question arises whether this government assistance is really the best way to spend the budget money since the decision for which company gets the money relies solely on the government and not on the people themselves it is up to the government to figure out which companies’ development will prove most pivotal for the betterment of the economy. This approach is not obviously preferred since the government should not be responsible for picking winners and losers in the privatization sector. 

Poor Education System

Ghana’s low-quality education system is one of the fundamental causes for its failures in stabilizing its economy and developing the country. The children in the education sector are not encouraged to be free thinkers rather instead of a system that promotes entrepreneurship Ghana’s educational system prep students to cram facts instead of preparing them for useful skills necessary in the workplace. 

Poor Infrastructure

Ghana’s non-oil related business failures can be linked back to Ghana’s poor infrastructure. This infrastructure has several problems which need to be addressed by the government in order to create revenue from the business. First structure projects have an increasingly low rate of completion as well as suffering from poor quality. There is a weak institutional capacity to develop new infrastructure which directly affects business and staggers the growth rate; however, the government is not oblivious to the problems created by poor infrastructure and have launched programs to help combat this.  

Electrical Power Problems

The main issue that is holding back the development and industrialization in Ghana is the power problem that exists. It is no secret that Ghana’s electricity sector is constantly in crisis with poorly educated workers and managers providing shoddy maintenance to the power grid which in turn provides shortages and outrageous countrywide. There is a wide gap between the supply and demand process which is made due to the blackouts that are common countrywide. Inadequate fuel supplies and poor infrastructure only allows about 2400 megawatts of electrical power to be used which is at odds with the 4000 megawatts of installed generation capacity. Financial aid is needed to bridge the gap between supply and demand for electricity and to increase the great transmission capacity and erect more power plants, but all of this is not possible because the option remains to either increase the price of electricity which is not something politicians are willing to do out of fear of losing public support. For the government, it is important to be pursuing economic development all the while remaining politically stable. 

Agricultural Challenges

The agriculture sector is widely neglected and if we have a chance to better the economy it must be done by reversing the years of neglect present in the agriculture sector. Statistics showed that half of the employment in the country is based in the agriculture sector, but the output has shown that it has been underperforming for years and struggling to catch up with the population growth. The agricultural growth GDP over the past decade has been less than 4% and this can be contributed to the rapid urbanization and lack of modernization techniques in the agriculture sector which results in a poor output in terms of economy and GDP. Lack of modernization and poor infrastructure has taken its toll on the agriculture sector and if Ghana’s economy stands a chance to progress it must take care of these problems. The government often makes promises of helping improve agricultural productivity, but this is just a publicity scheme since the capacity of the government to actually invest in the agriculture sector is limited. This can be combated by allowing investments from foreign firms and NGO’s who help set up the agriculture sector and introduce new streams of revenue.

Strengthening Food Security

The issue with Ghana remains that there are too many mouths to feed and not enough food to go around. Reconciling the supply and demand for food is something that is imperative to strengthen food security and request the implementation of a balanced food strategy that works on reducing the demand for food and increasing the supply of food. This can only be done by controlling the population growth which is on a rise and strengthen economic development by making sure that food from farm to the table is consistent. This requires investment in farming techniques and research and development and capitalization on urban farming as well as improving the agriculture productivity and developing techniques that are implemented with the help of farmers. The lack of proper irrigation and improvement needed in land and water management presents food shortages countrywide. The traditional farming practices practised need to become obsolete to help the economy. It is imperative to reverse deforestation and work actively to reverse climate changes. The figures presented by the CEA state that nearly 11% of Ghana’s GDP in 2017 was spent due to environmental degradation which costs about 6.3 billion annually. While gold and oil support the economy, these are nonrenewable resources that do not present an exponential growth rate in Ghana so to further better the economy renewable resources like cocoa, timber and other food crops need to be cultivated so that the livelihood of the country is not at risk.

Pollution

Air pollution causes about $2 billion loss per year to the country since it presents an environmental risk to public health and accounts for the death of nearly 16,000 people per year with infants under the age of five succumbing to death due to air pollution. 

Water Pollution is also responsible for damaging 3% of the GDP with a poor water supply and sanitation and the irresponsible disposal of industrial and toxic waste and water systems. 

Plastics pollution is a crisis that is plaguing not only Ghana but countries globally, however, in Ghana, 3000 metric tons of plastic waste is dumped in the litter or polluting the ocean which is, in turn, harming the economic development of the country as well as the environmental development.

Land degradation is costing Ghana over $500 million per year with deforestation costing $400 million per year. The exposure of Mercury and related Mercury poisoning to minors is costing about 240 million dollars in health costs. Change is also heavily affecting agriculture, forestry and energy growth which in turn triggers environmental crisis such as floods that affects millions of peoples, an example can be seen by the 2015 flashflood in Accra which cost 55 million dollars in damages. 

In order to further economic development, the government needs to prioritize these environmental issues in development planning and pursue evidence-based actions and take concrete steps to impact growth and human development. It is crucial for the economy not to ignore the impacts of environmental degradation and climate change on the economy and take the proper steps and implement the policy that fights against these factors and help save billions of dollars which can be allocated to helping further human development and growth and investment. 

Finally, Ghana would benefit from advancing critical policy reforms to allocate resources and benefits to communities.

Illegal Rosewood Trade in Ghana

Rosewood trees are a rare species that take 100 years to grow and a huge part of the illegal corruption that is going on between government officials in Ghana and China. Put option fuels the illegal rosewood trade which has been banned since 2019 but this has not stopped. Did you see officers of Ghana illegally shipping rosewood to China where it becomes imperial style furniture? Crap officials in Ghana have been accused of forging signatures and documents which allows the world to leave the country and please a major part in the desertification of Ghana which only contributes 2 destabilize the economy more. The EA in investigation documented this as a massively institutionalized timber trafficking scheme that was enabled by officers and corruption. Since 2012 about 6 million rosewood trees have been cut down for illegal export to China going against the international agreement of endangered species. Ghana presented are united front to the world that they were dealing with this corruption when they publicly fired the vice president and ministry of forestry after 300 containers of African rosewood went missing. But this does not mean that the illegal trade has been curbed rather it is only a small example of how deeply rooted and corrupt the political system of Ghana is. It is not only me but people all over the world and in Ghana who demand transparency in the policies and exports of Ghana to stem the corruption that is running rampant there and hindering the progress of the country.

Politics:

There were a number of high ranking and publicized cases of corruption in the office when the Mahama government was in charge. This only contributed to damaging their public image and aggravating the economic problems in Ghana. corruption cases like these have made the general population lose faith in the legitimacy of democratic institutions and allowed more people to partake in corruption. Buying votes is not uncommon in Ghana as evident by the highly publicized and shared video of Mahama buying votes by handing woman money at a marketplace. In a survey conducted by the Washington Post, 43% of the population describe that bribing voters were either not wrong at all or simply wrong but not something to be punished over. The extent of corruption is unknown since 76% of the people in Ghana feel that politicians should not be held accountable for directing development projects in areas that support them. Vote buying and gift-giving is a commonly accepted trend in Ghana who has political parties stay in power. But it is not only officers at a low level that are engrossed in corruption rather cases have come forth at the cabinet-level accusing politicians of corruption and money laundering. Politically motivated removals are not an uncommon thing in Ghana when it comes to establishing political power. Individuals in power enjoy their immunity since they easily buy off those who oppose them.

Police:

The police situation in Ghana can easily become compared to the police situation in the US. With police in Ghana having a history of using excessive force detaining suspects for extended periods and taking briberies. The US Department of State stated that most human rights abuses in Ghana were carried out by the police which was made evident when arrest warrants were charged against the commissioner and high ranking police officers for running a scheme that awarded 200 potential police recruits with fake acceptance letters and charging $500 to begin training at a Police Academy. 

Corrupt Government:

In the current government, a prosecutor was hired by Akufo-Addo to run an anti-corruption agency which backfired in the president’s face after the prosecutor accused the president of not letting him do his work and resigned from the agency. Martin Amidu later described the president as a mother of all corruption, a serpent who was not dedicated to eradicating corruption. Amidu resigned after submitting his report on the government’s plan to send the rights of the country’s most precious metal royalties to Agyapa Royalties Limited. Akufo-Addo’s government has been accused of borrowing more money in his first term than any other government in total since independence. Citizens of Ghana have sparked outrage and international concern by accusing the government of nepotism, conflicts of interest and poor transparency. They are discussing bid-rigging and illicit financial flows. All of this shows that the government has a very limited commitment to fighting corruption and eradicating it in the established institutions. Citizens do not want to play their part in fighting against complex corruption since it is proven to be too hectic if even a special prosecutor could not do it. Stop putting public pressure on the government to help root out corruption and hold the government responsible and demand transparency.

Written By: Ekow Shalders