Sun, Aug


Business & Economy

Maybe it’s just a few of us … But today, some Ghanaians have come to accept the painful fact that the only reason for our poverty and our persistently bad economy is bad politicians and the governments they form. Bad politicians and bad policies have kept our economy in bad shape and our people poor since the colonial era.

Maybe it’s just a few of us … But today, some Ghanaians have come to accept the painful fact that the only reason for our poverty and our persistently bad economy is bad politicians and the governments they form. Bad politicians and bad policies have kept our economy in bad shape and our people poor since the colonial era.

We have suffered irrational political administrations for far too long in this country. Our socialist state (and one uses the word “socialist” tongue in cheek) spends our money foolishly, without any scientific foresight. This is all because of a false philosophy regarding economics. Our politicians simply do not understand that an economy exists and develops only when citizens have the freedom to trade among themselves to create wealth.

It seems like ages ago, but when on 3 April the Vice-President, Dr Bawumia, and his Economic Management Team (EMT) declared that, by almost any measure, the economy is in better shape today than it was under the John Mahama government, all hell broke loose.

In a quick rebuttal, the National Democratic Congress said that the records listed by the EMT have rather drawn the country back. Speaking through the MP for Bolgatanga Central, Isaac Adongo ‒ the ultimate believer in the magical presidency ‒ the NDC, in what has become a defining moment in the lead-up to the 2020 elections, insisted that President Akufo-Addo is the cause of the weaknesses in the economy.

Mr Adongo insisted that no good has come from the present government. He conveniently chose to forget that nobody can make a good economy that bad in two years. Indeed, if we cared to check, we would see that today is the tomorrow the NDC promised Ghanaians.

Leave the beaten path

Reading the various commentaries, criticisms and analyses has become rather like looking through spectacles with broken lenses. The largely partisan analysis, rather than educating us, distorts our view. We do not see things as we should. An obvious lesson here is that most people are still putting politics ahead of what matters.

But then, Bawumia admits that “in spite of the numerous measures put in place to revive the economy, more needs to be done to the fundamentals before we reach the high point of … economic growth”. Is it true that Akufo-Addo is trying to give the economy a new direction, away from the path of the past? Bawumia insists that is the truth. Adongo refuses to respond to this assertion.

We all, members of the EMT and the opposition, know that the economy is not what it should be. We feel its effects in our pocket. Are there aspects of the fundamentals that we have been ignoring? The fragments of the differing perspectives on the economy demand that we focus to understand where we have been living in denial. Our institutions are not perfect and our journey so far seems to suggest that we are stuck in a desire to alleviate poverty, rather than working to create wealth.

Economics is not about alleviating poverty. It is about creating wealth. The sad fact is that our politicians have for far too long spent millions of dollars on poverty alleviation instead of investing in schemes that will create wealth. This should not continue.

Discourage dependence

That is why most of us support the new path down which this government is trying to take the nation. However, as citizens, we need to be told about the path and where it is leading. Is it parallel to the old path, dominated by politicians, bureaucrats, special interest groups and kleptocrats? Ironically, both big parties, for votes and power, and backed by a socialist constitution, have created the biggest entitlement programmes and policies since independence.

There are tough questions to wrestle with as we struggle to develop this nation ‒ and trust some of us, we are aching to ask questions. But before then, we would like to assume that, in taking a new path, this government will stop playing Santa Claus, promising “entitlements” that the state cannot deliver ‒ especially through jobs which will not contribute to meaningful economic growth. When it comes to creating sustainable, gainful employment, there is little that government officials can do, other than stay out of the way of the free-market job-creation engine, which runs on private investment, not government largesse.

Today, even as we fight over exchange rates and who is doing better, our policy prescriptions encourage dependence and stifle the full development of our potential. We should not allow the so-called poverty of the people to remain an excuse for the corrupt politicians to preach in favour of pro-poor, socialistic policies. Rather, the new path to which Bawumia alluded should lead to free trade, sound money, public goods, the rule of law and complete economic freedom.

Ironically, the NDC’s Adongo wants the government to tax the people more and spend far above its revenue intake to continue to feed the dependency syndrome.

Government spending, he claims, will have a ripple effect on businesses and jobs. What arrant nonsense, proffering the same old solutions of borrowing and minting money to revive an economy which depends on imports and produces next to nothing!

Scales from eyes

Sadly, while Bawumia admits there is a great deal to be done before we’re out of the woods, what is true about the economy that the NDC can see? The fiscal problems this nation faces are obvious to everyone but the NDC. The party lost the 2016 elections because of its inability to redress fundamental economic imbalances.

The problems it left behind cannot be solved by propaganda in less than two years. This makes its criticisms suspicious, and Ghanaians should never forget it.

We should be sick of the posturing in this country. Our politicians and their failed socialist policies work to an unbelievably dishonest double standard. Our unending economic problems are created by otherwise good people who wrongly believe that the government can take care of us, as if we were children. The debate exposes their vicious hypocrisy. Political power gives them economic power and a means of livelihood and so, in their quest for political power, they promote prosperity in terms they know to be lies.

The current debate is still full of fallacies which promote nothing but the pleadings of self-interest groups. I do not intend to become embroiled in who is right in the cedi-dollar debate, nor to bloody my nose debating the reliability of IMF-Bank of Ghana-Bloomberg figures. Nevertheless, one must not hesitate to say that the state of our economy is one of the long-run consequences of past socialist, pro-poor policies our politicians swore would help create prosperity.

The lesson to learn is that Ghanaian voters should not forget that there are good politicians/economists and bad economists/politicians. The bad politicians/economists present their lies better than the good politicians/economists present theirs. Dishonest people are more believable when they spout nonsense from their soapboxes than the honest men who try to show what is wrong with a bad policy.

This country has lived in denial for a long time. Our economy really needs a new policy direction. We all need to see our circumstances as they truly are. We cannot continue to look at our economy through broken lenses. Our challenge is not to ignore the weak fundamentals or to play politics with what we need to do. The old answers have not shaped up as we hoped: unfortunately, we have been circling back to the same problems repeatedly.

Outpace poverty

The only way to reduce poverty and usher in prosperity is to increase the rate of growth.

And the only way to increase growth is for the government to put in place policies which encourage the private sector to become more efficient and to grow faster.

In this way, the private sector will expand production, increase employment and pay higher wages and salaries.

Unfortunately, we do not see much of this in the current debate. All prosperous, peaceful countries have free trade, sound money, property rights, rule of law and excellent roads. If we apply their principles, we can be far richer.

For a start, our democratically elected politicians and their central planning state should be cut down to size. We cannot see continuous government deficit spending as the answer to our problems.

But then again, maybe that is just a few of us.

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