Global economic positioning

 

As Ken Ofori-Atta of Databank stated at Chatham House recently, “We have not seen such massive destruction of wealth in the history of modern civilisation and I might add also such rapid recreation of capital in the past year. Africa is truly astounded at how quickly the West can mobilise to save their companies when a fraction of those amounts could reinstate the impressive growth trajectory which Africa had achieved.”

 

Barrack Obama Photo courtesy

The rich economies are prepared to spend $2 trillion to rescue their financial infrastructure. For nearly a decade now, Africans have been demanding extra funding to the tune of $60 billion a year to accelerate its development – a mere 3% of what is being pumped into the western financial systems today to maintain socio-corporate standards there. The UN Under-Secretary General and Executive Secretary of the Economic Commission for Africa, Abdoulie Janneh, said the current economic downturn could cost Africa $251 billion in 2009 and $277 billion in 2010 in export earnings, despite earlier predictions that the continent would not be hard hit. So whatever is on offer to countries like Ghana by the IMF and World Bank only follows the old pattern of development assistance never matching what is taken out from Africa. Unfortunately, once again, (a little over a year after Ghana issued its first sovereign bond on the international capital market) we have been forced by exogenous circumstances to make a u-turn to over-dependence on the Bretton Wood institutions for our development spending. And we are being told to adopt a kind of fiscal discipline which the developed world is also finding to be fundamentally contradictory to their programme for stimulating their economies today.

Much noise has been made both in Ghana and elsewhere about Ghana’s ‘extraordinarily huge’ 2008 budget deficit of 11.5% of GDP. Indeed, the Ghanaian government has allowed it to serve as a roadblock in the way of maintaining, let alone increasing, the momentum of development Ghana has experienced in the last seven years. It is worth noting that in America the Congressional Budget Office estimates that the U.S. budget deficit will reach $1.85 trillion this year, 13.1% of GDP. Furthermore, they project deficits averaging over $1 trillion a year for the next 10 years, which will raise the U.S. public debt-to-GDP ratio to over 80% by 2019. Ghana’s total public debt stood at $7,742.4 million in May 2009, representing a debt-to-GDP ratio of 49.2%. Both huge budget deficits were necessary responses to national crisis and imperatives. In Ghana’s case the energy crisis of 2007 and the urgency with which Ghana needs to invest in its infrastructure and respond to a rising cost of living contributed to our unusually high deficit.

In July 2005, when heads of the world’s leading industrialised countries (the G8) pledged to step up development aid by $50 billion by 2010, with half of the increase going to Africa, African leaders hailed it as a significant high-gear shift in development aid from the developed world. Barely four years later, what we know today is that a lot more money can be found for productive investment to push millions of Africans out of poverty. U.S. development assistance to Ghana in 2007 – about $55 million – was nowhere near that befitting a nation carrying the kind of strategic weight that contemporary Pentagon thinking suggests. In real terms it is little improvement on the 1994 assistance of $38 million, plus $16 million in food aid. President Bush contributed an extra $547 million support from the Millennium Challenge Account. But this was given when America’s strategic flirtation with Ghana was purely based on its interests in Ghana as a geographical location for AFRICOM rather than the additional oil value it has today.

What has all this to do with Obama’s trip?

 

Negotiations are not held in a vacuum. A nation that sits around the table without prior knowledge and appreciation of its own strengths and weaknesses in its counterpart’s mind has provided gaping holes in its negotiation armoury and is bound to come out with a bad deal. A good deal depends on both an understanding of the cards in your hands and your opponent’s, and the skilful and strategic play of these cards. The first of these cards that the Ghanaian government must not fail to appreciate is the fact that Superpower America now sees West Africa as a zone of strategic importance – it’s no longer a question of just us needing them, but they now also need us.

 

Our trump card is of course oil. But if we are to prevent ourselves being played by the U.S., we must deploy this to maximum benefit: ultimately it is up to Africans to selfishly see our oil as means to provide energy security to others in exchange for support for more rapid African economic development.

 

In the words of U.S. Congressman William Jefferson, “The strategic question is which countries we depend on for this oil. The suggestion that comes out of all of these discussions is our best partners are in West Africa for many of the reasons I’ve mentioned: the commitment to democracy. Though there may be strivings and failings, nonetheless there is a commitment. West Africa is closer, making it easier to move product from there to here; the resources are, in most cases, not landlocked. Things usually work fairly well if you’re out in deep water.”

 

Since 2007, Washington has become more convinced that the Gulf of Guinea is an area of “Vital Interest” and Ghana is in prime position to serve as its hub, a point reinforced by the seemingly smooth transition from one democratically elected government to another of a different party.

 

AFRICOM

 

Furthermore, the U.S. is, understandably, bent on establishing a regional command for Africa, similar to U.S. Forces Korea, with a homeport situated on the African continent to protect their interests. West Africa is its natural home, given the need to protect energy interests in the Gulf of Guinea. Liberia has offered but simply cannot match the kind of convenience available in Ghana. It can be a win-win situation.

 

AFRICOM can protect U.S. investments in our region. But, those investments (regardless of our percentage share of ownership) are also fundamentally our investments – and thus the assistance in their protection will be a welcome boon. U.S. military presence can also help improve the level of military professionalism of our already well-respected troops. It is interesting to note that in the six decades since World War II in which America has maintained a military presence in other sovereign nations, none of the host nations has suffered instability or military takeovers, as the presence of U.S. troops helps entrench the subordination of soldiers to civil leadership. Moreover the presence of U.S. troops boosts social and economic activities in the host countries, too.

 

The loudest argument against Ghana hosting AFRICOM when the possibility first arose was that it would make us a target for anti-American terrorists. But a global examination of the number and location of American military bases overseas vis-à-vis the geographical targets of terrorist attacks, shows that this argument has far greater emotive value than evidential corroboration. At the moment the Americans say they are happy to keep the U.S. Africa Command headquarters in Germany, to coordinate all U.S. military and security interests throughout the African continent. But any reasonable assessment must conclude that this can be nothing but a temporary address and arrangement. Ghana should welcome that it is thus the target of America’s desire – and we should make the most of this, using it for our own advantage. After all, the process has already started.

 

The U.S. and Ghanaian militaries have cooperated in numerous joint training exercises, including the African Crisis Response Initiative, an international activity in which the U.S. facilitates the development of an interoperable peacekeeping capacity among African nations. And the head of AFRICOM has already reaffirmed Washington’s commitment to assisting the Ghana Armed Forces “to become more robust”. There is also the African Contingency Operations Training and Assistance program. Beyond that, Ghana and the U.S. have an active bilateral International Military Education and Training program.

 

In 2007, Kwesi Pratt Jnr, the Managing Editor of The Insight newspaper and the energy behind the pressure group Socialist Forum, warned Ghanaians against what he saw to be the looming danger of a U.S. military base in Ghana. He cited, inter alia, the erection of the huge American Embassy complex in Cantonments as evidence of this. Meanwhile, in August 2007 Major-General Ward, who was later confirmed as AFRICOM’s first commander, visited Accra. He held discussions with President Kufuor on “ways of strengthening military cooperation.” His high-powered secret meetings with the President, Minister of Defence and the Chief of Defence Staff triggered huge speculation. Much was made of Maj Gen J B Danquah’s public statement about the visit when he said Maj Gen Ward had ‘done enough to resolve’ Ghana’s concerns about AFRICOM, adding, “I have had the chance to hear [Ward] explain what is the reasoning behind the command, and it’s all about partnership.”

 

General T. Hobbins, head of the U.S. Air Forces Europe, has held discussions with his counterparts here on the possibility of establishing “lily pads”, landing and rapid airlift facilities in otherwise deserted terrain in certain strategic sites in Africa. Tamale Airport has come up as one of the “forward operating sites” targeted. That airport is said to have a runway capacity of accommodating massive U.S. C-3 cargo planes and troop transports.

Ghana is also already the site of a U.S.-European Command-funded Exercise Reception Facility that was established to facilitate troop deployments for exercises or crisis response within the region. The direct link to our oil is only too apparent: the Facility came out of Ghana's partnership with the United States on what is termed a Fuel Hub Initiative. It may sound like a mere gas station for the troops. But the choice of stable, imminently oil-rich Ghana as a Fuel Hub reflects a greater strategic interest in the country than as merely a filling station.

 

The Americans have not been shy in establishing a clear economic link alongside their military cooperation. Ghana is one of the few African nations, mainly those with oil, selected for the State Partnership Program to promote greater economic ties with U.S. institutions, including the National Guard. Expanding this to deepen our cooperation with the Drugs Enforcement Agency is one other area that President Mills should focus attention on.

 

Ghana the ‘natural’ ally

 

This all points to the fact that the United States sees Ghana as having all the vital statistics and morphological features of a ‘natural’ ally. We have the oil reserves, we are in the stable centre of the ‘New Gulf’ and we have the military discipline and stable atmosphere to make us the perfect hosts for America’s first major military migration to our continent. America is strategically placed to maintain and deepen its stronger footing here, ensuring it rather than China becomes our dominant ally. As one analyst confirmed, Washington has no interest in seeing China’s presence in Africa extended to Ghana. The fact, however, is that China is already here and the recent dealings between the Mills administration and the ruling Chinese Communist Party means the U.S. needs to act sooner rather than later.

 

Obama’s chief policy adviser assured Africans two months before the 2008 presidential race, “Barack Obama understands Africa, and understands its importance to the United States. Today, in this new century, he understands that to strengthen our common security, we must invest in our common humanity and, in this way, restore American leadership in the world.” Now is the chance for him to seek and effect the real change that will finally show the world that Africans are capable of more than managing their own affairs – but, crucially, Ghana must take up the opportunity provided by the state visit and the U.S.’s burgeoning strategic interest in us, to be the nation that demonstrates this.

By Asare Otchere-Darko

Asare Otchere-Darko is executive director of the Danquah Institute, a think-tank based in Accra.This article first appeared on GhanaWeb.