Accra, Ghana, May 20, 2019//-The recent arm-chair prediction by the British Economist Intelligence Unit (EIU) that the governing New Patriotic Party (NPP) will win Ghana’s 2020 election should be ignored.
This prediction has been rubbished by the largest opposition National Democratic Congress (NDC) whose Presidential Candidate, John Dramani Mahama has staged a strong comeback.
As EIU is aware, no data is sacrosanct. So, basing it prediction on data compiled by poorly equipped state agencies and other organizations is not the best. It also did not factor in the performance of the other sector of the Ghanaian economy which are critical elections.
The EIU rather focused its prediction on the country’s economic growth and fairly strong outlook, the Akufo-Addo government is still struggling to find its feet on the ground despite being in power for almost three years.
WHY EIU PREDICTION SHOULD BE IGNORED
Poor economic conditions
Economic indicators under the watch of Nana Addo Dankwa Akufo-Addo are phenomenally good but they mean nothing to Ghanaians who voted massively for him in the 2016 election.
So, he was sworn into office on 7th January 2017 to steer the affairs of the West African country for four years, subject to another four-year renewal by the people of Ghana.
Almost three years in office after riding high on hopes for economic change and social progress. The euphoria is over as his plans are beginning to hit snags fueled by creaky bureaucracy, partisan point-scoring and sums that do not add up.
The Akufo-Addo’s government was courting a major crisis of expectations from the start when it launched the poorly implemented free Senior High School (SHS) without a single policy document, a so-called reformed National Health Insurance Scheme (NHIS), $1million for each of the 275 constituencies, and a new factory in each of the over 216 Metropolitan, Municipal and District Assemblies (MMDAs) in the country.
Additionally, Mr Akufo-Addo who screamed in opposition that, “We have the men” to turn Ghana’s economy around had inherited a slow-growing and debt-ridden economy from the government of John Dramani Mahama. But Mr Akufo-Addo rather in office for almost three years has ballooned the country’s debt stock.
From the start, cacophonous voices within the governing NPP were cashing in on their huge parliamentary majority as a good riddance to push their own interests.
Businesses had called for lower taxes to end the era of so-called nuisance taxes, while the public sector labour unions wanted job securities in the country’s civil service and the dysfunctional state-owned enterprises (SOEs).
Still with a remarkable turnaround- Ghana’s economy grew by 8.5% in 2017 as against 6.3% in 2018, according to the International Monetary Fund (IMF). This growth is higher than the 3.5% growth of the previous government, but the Akufo-Addo’s government is far from delivering on its massive transformation its promised the people of Ghana.
While technocrats are working hard to get the reforms flowing, unexpected bigger issues dominate the lenses of party politicians across the NPP and the National Democratic Congress (NDC), and other smaller parties.
Some of these issues are: Are Ghanaians better off than they were in the previous Mahama regime? Why strong economic growth is not producing jobs for the teeming unemployed youth? Why the large infrastructure deficit?
With just a year away to the 2020 election, these issues are on the lips of politicians, civil society actors, economists, development experts, among others.
The governing NPP’s manifesto proffered spectacular visions of transformation in everything under the sun from fuel prices to corruption.
The NPP in opposition said its flagbearer (now in power) could turn the slow growing economy around to provide jobs, embark on industrialization and implement its free SHS.
Cracks within
However, NPP supporters are now among the worst critics of the government. “Things are really tough than before”, a female entrepreneur of the NPP who runs a start-up in one of the Accra business districts, said bluntly.
“One of my suppliers has confirmed to me what many people have been saying-that is there is no money in the system”, she stated.
She continued: “Right now, there is a general problem with cash payments from my customers who owe me including those who have been my customers for years”.
One of the key financiers of the NPP and Member of Parliament (MP) for Assin Central Constituency, Kennedy Ohene Agyapong who has been criticizing the government since its inauguration on 7th January 2017, is yet to stop throwing the salvos at the President and his vice Dr Mahamudu Bawumia and the ministers.
He has on several occasions threatened to walk out of the party if the current hardship economic conditions and marginalization of businesses especially his numerous businesses do not stop.
There is a deliberate scheme to starve my businesses of government funds, he flared up on an Accra-based radio station some weeks ago.
Mr Agyapong went on to accuse some party and government officials of killing his business especially the Kencity Media which runs Net2 TV and radio stations in the country.
He said the party officials had sidelined his media houses and do not run advertisements on the radio and television stations.
Banking sector crisis
On January 4, 2019-The Bank of Ghana (BoG) completed its aggressive 20-month of banking sector reforms that have led to the pruning of the country’s banks from 36 to 23. These banks have all met the new minimum paid-up capital of GHC400 million, from GHC120 million.
Addressing journalists in Accra, the Governor of BoG, Dr Ernest Addison said: “16 banks have met the new minimum paid-up capital requirement of GH¢400 million mainly through capitalisation of income surplus and a fresh capital injection.
The BoG has approved three applications for mergers. Consequently, First Atlantic Merchant Bank Limited and Energy Commercial Bank have merged, Omni Bank and Bank Sahel Sahara have merged, and First National Bank and GHL Bank have merged. The three resulting banks out of these mergers have all met the new minimum capital requirement.
Some private pension funds in Ghana have injected fresh equity capital in five indigenous banks through a special purpose holding company named Ghana Amalgamated Trust Limited (GAT).
In addition to the state-owned banks (ADB, NIB) benefiting from the GAT scheme, the other beneficiary banks (the merged Omni/Bank Sahel Sahara, Universal Merchant Bank, and Prudential Bank) were selected by GAT on the basis of their solvent status and good corporate governance. More details about the GAT scheme will be provided by GAT and the Ministry of Finance.
Also, GN Bank (GN) was unable to comply with the Minimum Capital Directive by 31stDecember 2018. Consequently, GN Bank has applied for, and the Bank of Ghana has approved the grant of a savings and loans company licence.
The Bank of Ghana has also approved a transition plan submitted by GN for winding down aspects of its business which are not compatible with a savings and loans company licence.
The Bank of Baroda (Ghana) Limited was licensed by the Bank of Ghana as a universal bank on 28th January 2008. It is a wholly-owned subsidiary of Bank of Baroda India which is in turn wholly-owned by the Government of India.
Pursuant to Section 123 of the Banks and Specialised-Deposit-Taking Institutions Act, 2016 (Act 930), the Bank of Ghana had revoked the banking licences of Premium Bank Limited and Heritage Bank Limited with effect from the date of this Notice and has appointed Mr. Vish Ashiagbor of PricewaterhouseCoopers as Receiver for the two banks.
Heritage Bank among other things obtained its banking licence on 4th October 2016 on the basis of capital with questionable sources. Furthermore, the bank was unable to meet the new minimum capital requirement of GHC 400 million as of 31stDecember 2018.
The Bank of Ghana has also approved a Purchase and Assumption Agreement between the Receiver and Consolidated Bank Ghana Limited (CBG) under which the Receiver has transferred some assets and liabilities of the two banks to CBG.
Menzgold crisis
From the above, economists and other financial experts are concluding that the financial sector is in turmoil. Adding to this, insecurity has crept into the market, heightened by events namely the early-October crash of Menzgold, a gold dealership firm.
The firm led by a twenty-something-year “showbiz” entrepreneur known as Nana Appiah Mensah popularly referred to as NAM1,had repeatedly clashed with regulators-BoG, Securities and Exchange Commission (SEC), and Minerals Commission for regulatory infractions.
The three regulators claimed that Menzgold was unlincensed and had no right to operate under their guidelines.
The company was defiant and went ahead to hire an international law firm-Baker McKenzie to fight the regulators on its behalf.
For months now, thousands of Menzgold customers are unable to access their investments after the SEC ordered its closure, due to its unregulated business model.
Earlier, December, Menzgold had asked its staff to proceed on leave following increasing threats to its properties as well as staff of the company.
Menzgold has been unable to pay its clients their dividends due to an ongoing battle with SEC and the BoG over its operations.
While the state institutions say the company has not been licensed to take deposits, Menzgold insists it does not take deposits and does not answer to the two institutions.
The President of largest opposition NDC Professionals Forum International, Arnold Appiah who is based in California, U.S, told African Eye Report that the current government has so renege on the promises made to the people.
Nana Addo and his vice president have betrayed the trust of the Ghanaian people, they have again resorted to lies in a desperate attempt to save their fast sinking image, he added.
Mr Appiah therefore appealed to Ghanaians not to renew the mandate of Mr Akufo-Addo and his NPP in the 2020 election. “They should rather vote massively for the NDC”, he stated.
Chains of unfulfilled promises
The youthful National Communications Officer of NDC, Sammy Gyamfi catalogued some of the unfulfilled promises of the Akufo-Addo’s government in his maiden Moment of Truth press conference held in Accra.
* They have delivered on their promise to pay all contractors within the first 100 days of their administration, such that today, GETFUND contractors are threatening demonstrations and closures of the schools they built.
* Indeed, they have for the past two years delivered $1million to each of the 275 Constituencies in Ghana, such that today, all 275 Constituencies have received $2 million each, for the construction of KVIP toilets.
* Yes, they have delivered on their promise to provide a congenial atmosphere for the growth of the financial sector, by supervising the contraction of the sector from a positive growth of 22.3% (as at last quarter of 2016) to a negative growth of 13.1%.
* Again, they have delivered on their promise of a lean government by appointing 111 Ministers and employing over 1,600 persons at the Office of Government Machinery.
* Indeed, they have delivered, such that in 2018, out of a total of GHS636 million allocated to the Ministry of Trade as stimulus package for industries, only an insignificant GHS1 million has been disbursed with the year almost about the end.
* They have delivered on the promise of One Village, One Dam by providing a handful of dug-outs and excavated ponds. 419 deliveries is their speciality.
* Yes, they have delivered on their promise not to borrow by accumulating almost half the total debt of Ghana from independence to date (50 billion Ghana Cedis), in less than two years, with very little to show on the ground.
* Yes, they have delivered on their promise to move Ghana from taxation to production by increasing VAT by 5% under the guise of VAT conversion; and introducing new taxes like luxury Vehicle tax etc.
* They have delivered on their promise to stabilize the Exchange Rate so well that, the Ghana Cedi is currently struggling against all major foreign currencies.
Today, the NPP’s so called economic messiah Dr. Bawumia, has completely lost his mojo. Due to his manifest impotence and cluelessness, he has chickened out from economics and is now seeking refuge in technology (GhanaPost GPS and Drone technology).
* They have delivered on their promise to build One Factory in every District by appropriating existing private businesses some of which have been in existence for over 10 years as their 1D1F projects. A phenomenon that is so ridiculous that the joke in town today is that very soon, even Guinness Ghana Limited, Coca Cola, GIHOC Distilleries and may be the Accra Mall will be commissioned as 1D1F projects.
* Yes, they have delivered on their promise to reduce Corporate tax from 25% to 20% such that today, Rural Banks are happy about the “crippling effect” of the 25% Coporate tax they have been paying over the last twenty four months.
* Yes they have, through their stellar performance, delivered on their promise to create sustainable jobs by causing the collapse of several businesses leading to thousands of job losses.
“President Akufo-Addo himself has not hesitated on several recent occasions, to speak of how his government remains on track to deliver on its mandate. It would appear to us that the Akufo-Addo/Bawumia government is still oblivious of what the times are in Ghana”.
The President and his Vice, who are busily enjoying the largess of power, have lost touch with the reality of dire economic straits that their mis-governance and maladministration has brought to this country, according to Mr Gyamfi.
All these happenings will have effect on the 2020 elections. It is therefore premature on any organisation’s part to predict the election in favour of the encumber government.
By Masahudu Ankiilu Kunateh, African Eye Report
