Providence, prudence and planning
Past and present, political stability goes hand in hand with a robust economy which has enabled good economic planning and growth. New oil deposits bode well for the future.
Business Area, Accra, Ghana 2008.
© D. K. Anobil
Of all the countries in the region, it looks like Providence has chosen Ghana on which to bestow its kindness. The country has experienced all sorts of pains but has remained intact. Like other countries in the region, it has had its fair share of disruptions in its political life with military interventions. Fortunately, it has remained the only country that has not faced any serious civil strife.
Benefitting the incumbent government of President John Agyekum Kufuor, growth has been registered in the economy which remains robust. And with the recent discovery of huge oil deposits, there are signs that the country is on course for a giant leap. President Kufuor could not hide his dreams of a better Ghana when he said in a recent broadcast to the nation that the hike in global oil prices was but a challenging moment and that “the inconveniences of the moment can only be temporary. Let us therefore look confidently into the future with hope.”
Kufuor is right. With oil finds of more than 3.9 billion barrels, Ghanaians can be said to be blessed at this time of their development and this could be due to Providence smiling on the people. Some analysts, however, disagree that it is all down to Providence. The country has since the 1960s been preparing for its future prosperity, they claim. “There has been a lot of work in that direction,” said Fred Sagoe, a former employee of the Ghana National Petroleum Corporation. “Prospecting for oil has been all over the country and it is just beginning to pay off. The country has also got a sizeable number of petroleum engineers who are working all over the world and so, it means the country was silently preparing for its future,” he added.
Kwame Nkrumah’s legacy
Vladimir Antwi-Danso, a senior research fellow of the University of Ghana’s Centre for International Affairs says “the foundation of the country’s economy was laid during the first republic under the late Kwame Nkrumah.” At the time, not many people realised that most of the policies being put into place would benefit the country later. There were those who criticised Nkrumah but his policies set the tone for the direction in which the country is moving today.
Antwi-Danso said that at the outset Ghana was a closed economy. An import substitution programme was put in place which at the time was condemned as a bad choice. However, it “brought about the construction of infrastruction which generated a high employment in the country,” he said. A good example is the Volta Hydro-electric Project at Akosombo which is today the country’s main source of power. In addition, Tema Port and its entire township which was part of Nkrumah’s industrialisation plan, has remained one of the main legacies that Nkrumah left the country.
Antwi-Danso said the government at the time also embarked upon an accelerated educational programme through the Ghana Education Trust that it set up. This led to the building of more schools throughout the country. “The consequence of this is that the country has highly qualified human resources which it has even exported to some developed countries and is now benefiting from remittances,” he said.
Governor of the Bank of Ghana, Paul Acquah, has confirmed the growth in remittances. Private inward transfers through the banks and finance companies for the first two months of 2008 amounted to US$1.380bn which represents a 48.7 per cent increase over US$927.9M recorded for the corresponding period in 2007. “Of the total transfers at the end of February 2008, US$275.5M accrued to individuals, compared with US$202.3M in February 2007,” Acquah told a recent press conference in Accra.
Whatever growth that the country is enjoying today has been sustained from the past. Some economic analysts say between 1970s and the late 1980s, the country went through some hard times. Much credit is hence given to former President, Jerry Rawlings, who was able to maintain political stability in the country at a time most of its neighbours were crumbling under all sorts of civil strife.
Safe haven in Ghana
Jacob Fredua, a taxi driver in Accra recalls that, “at the time that Liberia and Sierra Leone were under fire, Rawlings was able to keep Ghana intact. When Togo was under fire under the late Gnassingbe Eyadema, Ghana provided a safe haven for Togolese. When the Ivorian decided to kill each other, it was our country that was used to find a solution to the problem in Côte d’Ivoire.”
This does not mean that Ghana has not got any problems to deal with. There have been pockets of insecurity in some parts of the country. In the Northern, Upper East Region and lately, the Volta regions, there have been outbreaks of civil disorder but these have not disturbed the peace, although loss of life has resulted.
Antwi-Danso says that political stability that has given Ghana an edge over her neighbours. This has enabled the country to grow. “A massive injection of capital is largely responsible for lifting the the country up,” he added.
He is right. When Ghana went through a Structural Adjustment Programme (SAP) in the mid-1980s, foreign capital was used to revive an ailing economy. “The current regime which has been in power for the past seven years has been able to continue with the rebuilding process through prudent economic policies,” added Antwi-Danso. The present government has also been able to generate substantial foreign investment by declaring the country a Highly Indebted Poor Country (HIPC). This provided multilateral debt relief. “About US$6.2 bn of debt was written off through the HIPC status declared by the country,” said Antwi-Danso.
Thus, locally generated funds that might have gone into debt repayment were used to instead to finance infrastructure projects hence generating jobs within the economy. This has enabled the country to maintain its growth and control inflation up to this year when the global increases in oil prices and related food crisis affected some of the modest growth recorded over the past six years.
Notwithstanding this, Antwi-Danso says the government has also been faithful to economic wisdom. He gives credit to the “the Bank of Ghana which has also been up and coming with its monetary policy.”
1 Comment
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#1 camilla santos wrote at 17.09.2008 22:32:
seria interecante vocês falarem as maravilha que é a África