Even, Draconian Austerity Measures won’t Work for Ghana!

It may look gloomy, but the truth is that Ghana’s current fiscal mess is self-inflicted, and there is no QUICK FIX OUT THERE. Don’t even dream about so called the “Senchi Report” which is nothing but just another “we will ensure that, we will ensure that” political talk which is mixed with Economic jargons”. Just like the numerous previous reports, it has no specific road map or direction as to how to get Ghana out of the ditch. I’m sorry to reveal this in its raw state, not because I think “the sky is falling, or trying to be “a prophet of doom”. Of course, NOT! However, we must call a spade, “a spade”, not to pretend and call it a ‘metal broom!’
Let’s face it; Ghana has adopted strict austerity measures since the last quarter of 2013, to combat the massive debt and a huge budget deficit. In fact, significant cuts to the national health programs, education and local government budgets, tax hikes and high rates of nonfunctional utility services which are also not regulated are some of the austerity measures that have been undertaken by the government since 2012. Yet, the Ghanaian government is finding it difficult to stalk the decline of the cedi -which has been the worst-performing currency in sub Saharan Africa, depreciating by 13% since January against the dollar, compared with 15% during the whole of 2013 and 18% in 2012. Ghana's fiscal position has deteriorated with unbudgeted petroleum and energy subsidies, wages and interest expenditures creating a budget deficit of 11% of GDP in 2013 against a target of target of 9%.
Remember, at the end of the 1st quarter this year (2014), the Ghanaian government acknowledged on the possibility of approaching the International Monetary Fund (IMF) for a bailout, a clear indication of a worsening economic situation. Unfortunately, some of us have predicted that if Ghana dares to go for the IMF bailout, conditions attached to the funds would force the Ghanaian government to significantly reduce its expenditure and probably increase further the already high tax burden.
What's my point here? Our problem is that our leaders lack sound judgment and critical thinking acumen that is geared towards planning for tomorrow and managing our resources to the benefit of the masses. That’s why some of our leaders do things and ‘party’ as if there is no tomorrow. All they care about is this: “by what means can I survive today?" Unfortunately, the world does not care about Ghana’s economy because, it’s proportionately insignificant on the international stage in terms of the international stock trading. YES! Don’t be surprised. That’s why I've always argued that, it’s only Ghanaians who can, and MUST solve Ghana’s problems. Don’t think that IMF, WB, China or any political party in power will care.
Causes of our Fiscal crisis:
The world economy in general, is undoubtedly in serious turmoil, with a deepening global credit crisis, which started in 2007 and became full blown by the second half of 2008. I really don’t want to bombard you with a lot of numbers, however, unlike Greece, Portugal and some other countries, Ghana’s economic woes are about 85% self-inflicted wounds! And the remaining 15% are the ripple effects of the global economic crunch. You will agree with me that until recently, Africa was initially believed by many analysts to be somehow insulated from the global financial crisis, because of the relatively limited level of integration of most African financial markets with global financial markets. Why do I say so? Our crisis are self-inflicted, but pretending as if it has something to do with the global fiscal and structural crisis? Here are the reasons for our current quandaries:
1. The secrete printing of cedi to fund the numerous party campaigns. Over the years, since P/NDC, NDC, NPP and now back to NDC again, the various governments have been secretly printing currency to fund their political campaigns, non-documented political activities and other nefarious projects such as buying expensive estates or hotels in places like Dubai, Republic of South Africa, China, UK, etc. etc. sometimes using friends, girlfriends and their close associates as ‘authorized’ owners. Many of us know the fiscal implications or results of such unsympathetic activities.
2. Unprecedented borrowing Spree! Since the implementation of the bogus IMF/WB-SAP policies’ that one Dr. Kwesi Botchwey and his boss –J. J Rawlings brutally dived Ghana deep into in the 1980s and 1990s (longest serving dummy Finance Minister for a decade and half years), our leaders have come to believe that WE CANNOT SURVIVE WOTHOUT LOANS OR FOREIGN AID. Now, everyone knows the fact that in life, you cannot borrow your way through. Sometimes, we all need loans but to live purely on loans then, you’re simply a “capital fool“. This is FINA 5501: Fundamentals of Personal Managerial Finance. Since then, Ghana has been borrowing and borrowing as if the loans are ‘FREEBIES’! Well, loans are debt that must be paid back with interest, hello???
Fascinatingly, these two “educated idiots” are walking in the streets of Accra, proudly making a buzz from time to time on national media about how they’ve “screwed up” Ghana! And yet, nobody has asked them to account for their deeds. Absolutely no ACCOUNTABILITY at all as of today; Sunday July 25, 2014! Are we really seriously as a nation?
Guess what? The main idea of the SAP program in those days was to boost the education, energy and the waning infrastructure in the country, period! That means, all the numerous loans were supposed to have gone into funding our terrible education, energy and the other sectors. Please, ask yourself this simple rhetoric question before you read the rest of this article: how come Ghana’s education and energy sectors are the worst in our economy right now? The answer is simple: 70% of the loans are still in individual pockets. Part of the 70% of the loans also went to the purchase ‘handouts’ for party fanatics, expensive cars for party executives, $30 million (cash) transported to Brazil to help them boost their economy and widen their tax margin, appointments and creation of useless ministries who don’t even have a database of those sectors they claim to manage.
Miserably, only 30%, and I mean 30% of these loans go into the various projects originally earmarked for. The remaining 70% goes into individual pockets. This accounts for the reason why almost every politician in Ghana is supposedly rich. It also explains why the high expectation from the society that; once you get a political appointment, then it’s automatic passport to “Richland city”. It party explains why there’s such a huge and endless income inequality gap in Ghana at the moment.
3. Judgment debt! Judgment debt! Judgment debt! Never in my business studies did I ever imagine that the phrase “judgment debt payments” could be a viable business venture for our own elected and appointed officials to represent our interest could be so wicked, and maliciously connive with few greedy ones, and loot their nation beyond believe. But now I know some African leaders, especially those in Ghana and other places; both past and present leaders and their cronies, can be very dangerous, but shielded with impunity from accountability and subsequent prosecution. Well, I decided not to mention that ‘ugly’ phrase - judgment debt anymore. Unfortunately, I’m forced to come in strongly it. How on earth, does our president travel around the world, begging for $100 million loan, and then turn round and ‘trash’ a freaking $600 million as judgment debt payments because of dummy and reckless state officials we can’t even read simple loan contractual agreements? What economic sense does it make? I always “freak out” anytime I talk about judgment debt, for the fact that there is no sense in it. I prefer to leave it here, for you to judge!
4. Wasteful government spending: Currently, the government of Ghana spends so much money to pay the salaries and wages of people in public service, who are basically doing nothing at the public sector. I did a study a couple of years ago about productivity and LEAN processes as part of my graduate business school -Operations Management Project. You’ll be surprised to realize that as at now, about 6 people use about 3 hours doing the same work that could be done by only one person in about 45 minutes in the developed world. Surprisingly, the private sector is a whole new ‘ball game’ when it comes to correlation between efficiency, accuracy, safety and productivity! The only problem with the private sector is lack of customer service and ethical values which is pretty much imaginary, especially in the sole proprietorship and partnership businesses. Can somebody tell me the economic benefits the responsibilities of some of the useless deputy ministers whose responsibilities are just going about spewing nonsense to the general public and fronting party propaganda at tax payers’ expense? What about the chief directors? Can’t they do the jobs done by these deputy ministers? What about the ministries of Sports, and chieftaincy? Should they be departments or a full ministries? Seriously, Ghana? Can’t we save some significant amount of money if we create departments for those sectors? No wonder we are languishing in misery of fiscal crisis as an annual ritual. Sometimes, “thinking” is the hardest job!
My point is that; the government does not create “jobs oooooooh, come ooooon, Ghana, as Dr. Kwaku A. Danso, moderator of “Glu-Ghana leadership forum” says it nicely”!!! It’s the private sector that create jobs! Abba! Cut the waste and develop the private sector, please! Currently, when you talk about Doctors; it’s government job, Nurses- government job, Teachers-government job, the biggest regional hospitals- government jobs, Korle Bu- government job, Pharmacists-government job, council of state- government pay roll, numerous useless commissions and committee- government pay roll, task forces doing the work of IRS, customs services-government pay roll. We don’t need big government to turn things around. What we need right now is to cut the wasteful spending spree.
Here’s the deal: the government must invest in the development of the private sector, and revamp the declining education sector concurrently to absorb the huge number of graduates of the funny association called ‘Graduate Unemployment Association of Ghana’. At the moment, some 18th and 19th centuries’ disciplines are still being thought in our universities and Poly-techniques. The sad part is that there are no demands for such programs in the job market out there. We MUST start thinking about designing courses and programs that are “hot” out there in the job market such as: Surgical Technicians, Sonographers, X=ray Techs, Networking Engineers, Financial Valuation Analysts well-vexed in Excel and Minitab, Six sigma and Lean certifications, HR experts who know simple ‘KRONOS’ software to monitor attendance and productivity in government agencies and sectors, Database Administrators, Cybersecurity professionals, Business analytics, Public Health, Health Information Technology ( Health Informatics), New Sustainability programs deeply retooled in environmental degree programs, Data Mining, Petroleum Engineers which is much needed now in Ghana at the moment, Feature Writing for the Web, Geriatric Health Care, Occupational Health and Safety professionals, Mobile/Social Media experts-(Graphic designers, videographers, casual game/app developers and Software Engineers who are needed to design and develop content for mobile platforms, IT professionals and the various emerging sciences.
My point is that with all these menace on display in our society today, with time, it kills our intellect and thinking acumen to "think independently" completely. In other words, it blinds our horizon and the exposure to the international world, thinking it's all about our society and nothing else out there. And that's how and why corruption, greed, and what I call "pen-robbery and looting" have all become a "norm"- a normal lifestyle in Ghana and other parts of sub-Saharan Africa. We have teachers in our society who have not been paid salary for more than three years now, and yet we claim to have a responsible government surrounded with uncountable ministers. Only in Ghana ooooooo!
5. Greed, excessive lust for material wealth and unprecedented corruption level: These days in Ghana, corruption is just a daily norm. It has something to do with our deep lust for money and naive mentality that, possession of material wealth is the only way to command respect in the Ghanaian society. Over the years, I’ve come to the realization that; what an average African or Ghanaian cares for is "myself and family, I want it ALL and NOW!" So, in the event that we're not able to get it all and now, then we resort to survival of the fitters lifestyle namely: Greed, Selfishness, Bribery and Corrupt lifestyle as the only means of financial success, the infamous Create, Loot and Share with family and cronies for future use, Kickbacks, broad daylight stealing from the state coffers, Favoritism and bias in sharing the national cake, class system based purely on how much money one has, Extreme lust for money, Using Religion as a lucrative business venture and unfairly trick and deceive the vulnerable to gain material wealth, etc., etc.
What do we do now?
The truth is that, there is no quick fix or remedy out there! We must learn to live the moment of truth, take a deep breath, and ask ourselves: how did we even get into this mess in the first place? It might not be the answer you want to hear, but we can only get out by reversing those very stupid practices that got us into it. We cannot continue to behave like ostriches and burry our ‘empty heads’ in the sand and pretend, oh! We are safe, everything will be alright. Our economic crisis are self-imposed or self-inflicted, it has very little to do with global economic crunch, so let’s not lose focus on that fact. They are the result of our dummy leadership and corrupt practices, and can only be corrected through the same path that got us there.
First, We MUST hold our leaders accountable for their actions and inactions. In other words, they should account for every cedi they have been entrusted on our behalf, and if found guilty, then heads must roll. That’s the only effective way to reduce corruption. If we don’t begin to punish people for wrong doing, then I can guarantee you, Ghana will never move forward, because corruption will continue to crumble us beyond believe. How many people are in jail for the massive “judgment debt scam” that has completely bankrupt Ghana but have benefitted some few folks in leadership? How many are in jail today? Don’t you think people will continue to steal if only they get the opportunity and the right environment, knowing that they will only be criticized for just one week in the media, and nothing else? Of course, they will steal!
Second, let’s halt the phony contractual loans’ spree a.s.a.p.! You cannot develop as a nation by purely living on loans. The erroneous mentality that, Africa cannot survive without loans and foreign aid must cease right now! Loans upon loans which go to individual pockets are part of the very reasons we are in this fiscal muddle! Sometimes, I wonder if a renowned Prof. Alvin Tof?er’s book: “Rethinking the Future” was perhaps referring to dummy African leaders when he wrote; “The illiterates of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn and relearn”. I’m not too sure, but it’s just a perfect descriptive behavior of some of these leaders. In other words, we have to be very careful who appoint or elect as representatives. To be honest with you, the Emotional Intelligence (EQ) of some of our elected and appointed representatives are indeed, questionable, especially those who contract these pretentious loans and those who are supposed to defend the government in the law courts. It makes some of us wonder what their scores will be if they are forced to take EQ test. If I’m the president of Ghana, I will make the EQ test a mandatory for all my cabinet and other senior officials, for real!
Third, we must widen the tax base. All the sector ministries in Ghana, spearheaded by the IRS and the other revenue collections departments and agencies such as Customs Service MUST create a database system for every adult person living in the country, to be managed by Database Administrators. It’s a big shame the whole president of a country like Ghana to walk to the tax office to file for his tax, and want others to learn from him. Seriously? This was done in the early 1900s in the developed world, not in the 21st century. I mean who does that in the 21st century? Our leaders must invest some of the stolen loans in creating a reliable database, through a similar process like how population census data are collected, and then train the young folks to do the job. You cannot sit down and expect; for example, a tomato seller in the ‘Techiman’ market of Ghana to walk to the IRS office and file for his or her taxes. If you’re a leader and your job is to collect revenue for the government and that’s how you think, then, you are a capital DUMMY! You don’t deserve to be there, period. You must figure it out, and fix it!! The employment ministry must also have some kind of simple technology to track employee attendance and productivity, in addition to the database system. Simple KRONOS system will do the job. It’s simply a new era of innovation in workforce management that delivers results. Currently, ‘KRONOS’ is leading the way around the globe, with thousands of customers in more than 100 countries. They help organizations of all sizes and industries better manage their workforce in the cloud. Let’s learn from others and we’ll get there! It’s NOT TOO LATE, GHANA!!!
We must also cut the waste! I don’t have to preach about this issue over and over again. The various judgment debt payments to some of the past and present leaders and their cronies, wasteful government spending on the numerous and some useless ministerial posts that have been going on for years, outrageous ghost names on government pay roll, pickup trucks and other ‘freebies’ (to non performing and subverting of peace and progress) Kings and Chiefs, sanitary pads (Tampons) for school girls, free laptops for some selected group of Ghanaians based on their party affiliations ethnicity, 275 parliamentarians enacting laws which end up being archived in shelves but of no practical use for just 25 million people, etc. are all examples of wasteful spending extravaganza. Please, cut the waste and save the poor tax payer some millions of dollars annually.
Trust me, unless there’s some sort of accountability measures, and punishment for all those who have directly or indirectly facilitated in any of the above mentioned menaces, to serve as a deterrent, we’ll be talking about this same issue year after year, till thy Kingdom come!
PLEASE, DO NOT EVER, EVER, believe any “fool” who tells you that our economic crunch is just part of the global economic trend! Who told you that? That’s how they hide behind the scenes to dupe the state with impunity all these years!
Remember it’s all about attitudinal change, effective leadership, new ways of doing things, positive thinking with innovative ideas that can help Africa to overcome the power of vested interest in personal properties of the corrupt and heartless leaders in our motherland. In other words, it only Science, Technology, and Common Sense that can lead the way, not Religion, Culture, and Superstitions. That’s the right and only way, that can rescue Africa in general and Ghana in particular, from this fiscal mess. Until that dream comes true, I bet you, there is no draconian austerity measures out there that can rescue Ghana. The “Senchi Report” is just a throwaway and a waste of tax payers’ money.
Thank you.
Peter Osei-Adjei
[email protected] , [email protected]
The Author is the President and Coordinator-Web Communications for
“Overcoming the Power of Vested Interest among African Youth”. The group uses the power of pen to educate corrupt and greed African leaders about managing complex organizations as well as effective leadership skills.