Ghana: Recalibrating the Course of Progress
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| Nana Akufo-Addo |
The large crowd of chiefs and people who gathered on that fateful Saturday of 4th August 1947, 67 years ago, in the historic city of Saltpond, to launch Ghana’s first nationalist organisation, the United Gold Coast Convention (UGCC of blessed memory), were heavily influenced by the imminent approach of India’s independence, which was barely a week away. They would employ the same Gandhian, peaceful, nonviolent means to achieve freedom and national independence for the Gold Coast, which they agreed to rename Ghana. Their vision was clear: they would build a new modern, united African nation, free of foreign and domestic oppression, which would be grounded on the principles of democratic accountability and the rule of law. Despite the subsequent division of the nationalist movement into its conservative and radical wings with the arrival of Nkrumah four months later, this proved to be the enduring vision of Ghana’s march towards freedom.
Ghana achieved independence peacefully as a thriving democracy and, under Kwame Nkrumah’s dynamic leadership, became, on the 6th March 1957, the hope for Africa. The rich possibilities of Ghana for her people and the wider African people were, however, tragically subverted by the descent into authoritarian rule during the First Republic and the ensuing decades of instability, characterised by a series of military coups. Ghana managed to achieve the unenviable feat of four republics within a period of 35 years. (It took France 150 years to achieve five republics). Not only did this period experience widespread violations of the human rights of the Ghanaian people, it also marked a significant decline in the living standards of the people.
Prospects for the 4th Republic
Fortunately, on April 28, 1992, in the historic referendum of that date, the Ghanaian people, by an overwhelming margin, endorsed democratic governance, as established by the Constitution of the Fourth Republic. We have witnessed under the 4th Republic the longest period of stable, constitutional rule in our history. Instructively, these last 21 years have also brought about significant progress in Ghana’s economic growth and human development. However, we cannot take public confidence in our democracy for granted. Leadership carries the burden of strengthening public confidence in the capacity of our young democracy to deliver where it matters most: improving the lives of the people.
What, then, are the prospects for the future? I believe those prospects are directly tied to our ability to overcome three basic challenges frustrating the course of our progress.
The first is the institutional challenge. A paramount concern of our time has to be the consolidation of Ghanaian democracy, requiring the strengthening of our institutions of state, particularly, in their capacity to deliver results and to be accountable to the people. The most direct way of so doing is for all Ghanaians to accept to play by the rules we have set for ourselves in our national constitution and in our laws. Playing by the rules also means enforcing those very rules. By this, we can deal with corruption and abuse and theft of public funds. It is critical to the process of recalibrating the course of Ghana’s progress. We must have a public sector that is efficient in delivering universal access to good quality education, healthcare, legal remedies, personal security and basic infrastructure.
The second challenge is the transformation of the Ghanaian economy. Today’s digital revolution and the fierce pace of technology mean that knowledge, skills, technology, creativity and capital have become very mobile, making them more important in determining where production takes place rather than the location of natural resources. How ready are we to promote national prosperity and protect national security, knowing all too well that the biggest threat to our social and political stability is the phenomenon of widespread youth unemployment? As one travels across the villages, towns and cities of Ghana, one cannot help but notice the large numbers of able-bodied young persons who are idle. This is a consequence of a failed educational system that does not provide them with the requisite skills and a structurally rigid economy that cannot generate the large pool of good jobs with good pay. It will be suicidal on the part of policy makers if they do not act with urgency to address this crucial matter.
The third challenge is a cultural and intellectual one. It is about our society and its value system. It is about our individual and collective commitment to Ghana’s wellbeing. How strong do we live by our values? What are these values, really? We must garner the courage to elevate the operative principles and standards of our society. After all our daily prayers and finger pointing, why do we allow the paying of bribes to be a tolerable social behavior? We have devalued our values to allow people to get away with it. It is time to be deliberate in setting a higher bar for ourselves and, especially, for our leaders.
We can succeed if we build a stronger sense of national pride, a greater sense of unity, a stricter sense of responsibility, and a richer sense of genuine ownership among Ghanaians. In our homes, in our communities, in our workplaces, we must encourage the development of a set of patriotic values that push us to do more; reward creativity and success, and, above all, make the creation of an equitable society of opportunities and aspirations for every Ghanaian, irrespective of the circumstances of birth, the bedrock of our nation building. We must build and be seen to be building a Ghana for all Ghanaians.
We need to maintain hope and confidence of our people in the capacity of our democracy to deliver. Leaders from all fronts of our society should do more to let Ghanaians know that public leadership is a vehicle for the pursuit of the common good and not for self-enrichment. I want to see that paradigm shift in my lifetime.
The Youth Bulge
According to Ghana’s 2010 national census, 16.5 million Ghanaians, some 66.65% of the population, were below the age of 30. Africa has the youngest population in the world. If we plan well, the youth bulge will become a demographic dividend. However, as one writer warns us, “if a large cohort of young people cannot find employment and earn satisfactory income, the youth bulge will become a demographic bomb, because a large mass of frustrated youth is likely to become a potential source of social and political instability.” (Justin Yifu Lin, former World Bank Chief Economist and Senior Vice President, Development Economics).
We should dedicate revenues from our new oil wealth to investing in our youth. Education and skills training are the most important source of empowering and providing opportunities to the youth. Currently, at every stage of Ghana’s education, our children are falling out of the system. Over 60% of those who make it to primary school do not make it to secondary school. We are conscripting, year after year, a future army of unemployable adults. This is dangerous. Ghana deserves a leadership that thinks of the next generation, not the next election. This is the reason behind the priority proposal to redefine basic education and make it free and compulsory from Kindergarten to Senior High School. No child must be denied access to quality education. For this generation, in the context of mass poverty, the responsibility for ensuring that lies on the state.
So how do we do it? Ghana’s problem is essentially the African problem, a producer of primary products and an importer of finished goods. The structure of our economies has not changed much. We have merely shifted from importing finished products from the West to importing them more and more from the East. The share of primary products in total exports from Africa increased from about 72% in 2000 to about 78% in 2011, with crude oil accounting for 51% and 57%, respectively, and the share of manufactured goods declining from 21% to 16% over the same period. Statistics from other economies tell it better: in 2010, manufacturing contributed to 32.9% of exports from Brazil, 82.7% in Germany, 85.3% in South Korea, and 93.2% in China.
Ghana’s dependency on raw materials has grown even more than the continental average. In 1928, at the departure of Gordon Guggisberg, the colonial governor responsible for building the nation’s infrastructure to serve the Gold Coast economy, 70% of our foreign exchange earnings were from gold, cocoa and timber. In 2012, cocoa, gold and oil accounted for 82.2% of total exports.
Currently, the cedi, Ghana’s currency, has been competing with David Moyes, the Manchester United coach, in being the butt of many jokes. In response, the Central Bank recently announced a series of controversial exchange control measures to save the cedi. But, beyond having an economy managed by a competent team, the structural weakness of that economy must be fixed to keep the currency predictably stable.
A Future of Fracking and Value-Addition
The philosophy for the future of our economy can be summed up in two words: value addition. Whether it is in agriculture, tourism, the arts, banking or manufacturing, the goal is to add value to what we do. The good news is that Ghana, since oil production began in December 2010, has consistently registered some of the highest economic growth rates in the world. The bad news: it has not been accompanied by a rapid increase of jobs. The signals are bad enough to wake us up, change course, and travel the road of structural transformation. Ten years ago, it was envisioned that Africa would account for 25% of all US crude oil imports by 2015, registering a ten-percentage point increase in the process. Today, there are uncertainties over Africa’s future status as a pillar of global energy security. This is because the centre of gravity of oil production over the next two decades will see significant shifts because of shale gas and tight oil.
Fracking, or hydraulic fracturing, is allowing the US and Canada to tap unconventional oil and gas deposits which they could not reach just a few years ago, thereby reducing substantially their dependence on petroleum imports. The British government also recently announced support for fracking in Britain and in offshore waters, to ease a reliance on foreign oil and gas. The energy revolution that fracking brings only adds greater urgency to the need for Africa, which produces nearly 20% of global oil, to prioritise the process of diversifying its economies. Simply put, the Guggisberg economic model cannot crank us into the future. We must diversify to remain economically relevant in the 21st century.
It is important to note that the digital revolution has not fundamentally dislodged manufacturing as the main engine of growth and catch up. The empirical association between the degree of industrialisation and per capita income in developing countries has been re-stated by a recent extensive, corroborative study done by Harvard and MIT scholars, Ricardo Hausmann and Cesar A. Hidalgo ('The Atlas of Economic Complexity: Mapping Paths to Prosperity'], which covered the economies of nearly every nation in the world over the past 60 years. Their study shows that the path to prosperity is still in building the knowledge and capabilities necessary to manufacture goods and make things.
With a clear policy framework laced with incentives, the same entrepreneurial spirit that gets our people to travel to China, Germany, Turkey, USA and the UK to buy manufactured goods to sell can be recalibrated for them to import capital inputs that will make us finish the goods back home. What is required is a leadership committed to this transformation agenda; a leadership that can take society along that must-travel highway.
Just like 57 years ago when Ghana took the lead in the struggle for freedom from colonial rule, today, Ghana has what it takes to be at the forefront of the industrialisation agenda. By 2030, West Africa is projected to grow to some half a billion people. This requires economic policies that can weave together our numerous resources with our talents and energy to turn our nation into an economic powerhouse, generating employment for our people. The strengthening and transformation of ECOWAS into a genuine regional market has to be a major goal of Ghanaian public policy in this decade.
Value for Money
To succeed in industrializing Ghana, we must show a far greater seriousness in building the nation’s infrastructure, including housing, transport, power, water, irrigation, and ICT. I believe we could have done much more recently even with the limited resources available. A major impediment to this is the worrying deficit in value-for-money when it comes to public procurements. The World Bank and Government of Ghana estimate a funding gap of some US$2 billion per annum to meet Ghana’s infrastructural needs. Yet, we managed to register a record budget deficit of nearly US$4bn in 2012, which occurred without meeting our spending targets for infrastructural development in that election year. Two years on, our new Finance Minister is still struggling to plug that fiscal hole instead of spending his vital energies to help transform our economy. Efficient management of government resources and projects is needed to develop greater confidence in the economy. As the experiences of the successful countries in Asia and elsewhere have shown, government has a very important and positive role to play in spurring industrialisation and economic transformation. It needs not be state-owned; it needs rather the vision, commitment and intelligent support of the state.
There is a lot that is right about Ghana and about us, as Ghanaians. We are enjoying the longest period of stability since 1957. We are a democratic nation with a God-fearing people proud of their freedoms. Our country is rich in human and mineral resources. We can draw on a significant number of educated, hardworking and enterprising people, both at home and abroad. Ours is a nation with a positive international image on a continent that is finally but slowly being taken seriously. We are hailed as a model of democracy and stability in our region. We have a young, dynamic population ready to define their own destiny. What they want are the opportunities to grow and make it happen.
We must re-imagine what Ghana can be like in the 21st century and re-dedicate ourselves to building that new Ghana. We can build a United Ghana even in a fiercely competitive democratic environment. A Ghana where there is tolerance and mutual respect for divergent views, where religious freedom is stoutly championed. A Ghana where politicians do not exploit our ethnic differences for electoral gains. A Ghana where rules are obeyed by both leaders and the led.
Our country has everything it needs to progress. Ghana is ready and so must its leaders be. I am confident that the future for Ghana is brighter than the dream of 1957 and I know that this century is the era of our manifestation.
God bless Ghana ! God bless Africa !
By Nana Akufo-Addo
The author is a Ghanaian statesman committed to democracy, the rule of law and stronger institutions.