By Samuel K. Obour
When John Mahama campaigned on the mantra of prosperity for all in 2012, many voters spurned a mouth-watering offer of free SHS from the opposition, and handed him the keys to the Flagstaff House.
Almost three years on, however, the promise of a better Ghana has been an illusion – but that’s not the sad part. After all, it’s not a crime to promise and fail to deliver.
What is consternating and exasperating about Mahama’s presidency is that, instead of the prosperous Ghana that many enthusiastically anticipated, what we have is an economic basket case – a bitter Ghana, where pain, hardship and uncertainty now prevail.
In effect, a government which promised to deliver a better Ghana has rather overseen a mind-boggling degradation of the economy it came to meet.
We see this degradation in the high cost of living; increased taxes; high inflation; high interest rates; increasing utility tariffs; ballooning fuel prices; epileptic power supply; and the continuous depreciation of the cedi.
The combination of all these has triggered a steep fall in the standard of living of many Ghanaians. The dreams and aspirations of many ordinary people have been shattered, while several businesses have been forced to either fold up or scale back production – a development that has caused many workers to be laid off.
To put things in proper perspective, so that everyone understands and appreciates the sort of devastation that has been wreaked on the economy by the current government, let’s examine some economic statistics under the late John Atta Mills’ administration (which preceded the current government):
President JEA Mills 2011: GDP growth: 14%; Inflation: 8.7%. (In 2009, inflation was at 19%, but the Mill’s government brought it down to 10.8% in 2010 and 8.7% in 2011.) Debt to GDP ratio: 38.90%; budget deficit: 5.1% of GDP; Bank of Ghana policy rate: 12.5%; Exchange rate: Gh₵ per 1US$ – 1.55 (2009, 1.4; 2010: 1.47).
A PricewaterhouseCoopers commentary on the 2012 budget delivered to Parliament on November 16, 2011, testified to the strength of the economy:
“There is evidence of a sustained growth in Gross Domestic Product (GDP) from 4.0% in 2009 to 13.6% in 2011. The increased access to credit, falling trends in lending rates and increased foreign direct investments all suggest increased investor confidence in the domestic market and an improving economic environment. It is no surprise that the International Monetary Fund (IMF) considers Ghana as one of the fastest growing economies in the world today.”
The expectation of many Ghanaian voters, ahead the 2012 Presidential Election, was that Mahama would consolidate the gains painstakingly made by the Mills’ administration, but what we have seen so far is a heart-breaking reversal of those gains:
President JD Mahama 2014: GDP growth: 6.9%; Inflation: 16.5%; Debt to GDP ratio: 60.8%; budget deficit: 9.6% of GDP; Bank of Ghana policy rate: 21%; Exchange rate: Gh₵ per 1US$ – 3.21 (2013, 2.35; 2012, 1.9).
Under Mahama’s leadership, as the above figures incontrovertibly indicate, this country has had a phenomenal fall from grace.
All economic indicators which were positive under Mills are now in red. What is sadder is that things are not going to get better soon.
The economy is even worse off in 2015. Debt to GDP ratio has ballooned to about 66%, and fast is approaching the doomsday scenario of 70 per cent debt to GDP ratio; inflation has increased to 16.6%; Bank of Ghana policy rate is at 22%; Exchange rate per 1US$ is now GH₵4.35, while average lending rate stands at about 33.9%.
The average lending rate in West Africa is said to be less than 20%. In Sierra Leone, for instance, it stands at 19.3%, according to the Association of Ghana Industries (AGI). And as we approach the 2016 General Elections, it’s expected the current situation, fueled by irresponsible spending, will deteriorate.
A Facebook pal, Kwame Sarpong Asiedu, wrote an analysis that typifies how poorly the cedi has performed in Mahama’s Ghana:
He said: “Did you know that $1 is GHC4.39? Did you know that when Alfred Woyome took our GHC51 million it was equivalent to $31 million? Did you know that GHC51 million is now equivalent to $11.62, representing a loss of about $20 million?
“Did you also know that since 2010, Treasury bill rates have been over 22%? Did you know that if Woyome had invested the money from that time at these rates, he would have made another $31 million in interest?”
“How did we get here?”
“So where did we go wrong? What did we do to deserve this unending hardship? We’re being squeezed dry, we’re wailing yet no one hears our voice. Is this what we bargained for,” popular Sports Journalist, Maurice Quansah, recently lamented on Facebook.
He was reacting to news that, aside from the 15% increment in the prices of petroleum products which was taking effect from July 1, electricity and water tariffs had also been increased by 51% and 15% respectively.
Needless to say, the national mood relative to how badly the economy has been managed, is encapsulated in Quansah’s lamentation above.
For many ordinary Ghanaians, it seems as though a noose has been placed around our neck and is being tightened daily.
“How did we get here?’” is, therefore, a question many of us have asked ourselves at one point or the other in the last two years.
In next week’s column, I’ll explore why we find ourselves in this boiling cauldron.
This country is on the precipice of irredeemable economic damage. It is a time that calls for men and women of integrity and conscience to stand up and be counted.
God save our homeland, Ghana.