Ghana overview – After a trailblazing start, it must now tackle current challenges head on Featured

Ghana overview – After a trailblazing start, it must now tackle current challenges head on

Ghana Overview – After a trailblazing start followed by post-independence turmoil, Ghana has consolidated itself as a peaceful democracy with a growing economy. It must now tackle current challenges head on   

Ghana made history in 1957 as the first black African nation to attain independence. Christened the Gold Coast by its British colonisers, it was symbolically re-named after an ancient West African kingdom that was so rich that its dogs wore golden collars. Ghana became a beacon of hope for Africa as its founding father, the pan-Africanist Kwame Nkrumah, launched an ambitious industrialisation and infrastructure-building programme, whose foundations remain visible today.

Caught in the crossfire of the Cold War, Nkrumah was deposed by the military in 1966 and there followed a turbulent period of political instability. In 1981 airforce officer Jerry Rawlings staged his second, and Ghana’s fifth, coup. Although he called his return a people’s revolution, Rawlings eventually settled for a series of conservative policies, relying on western financial institutions and donors to rescue the country’s stagnant economy in return for painful structural adjustment reforms.

Following the introduction of multiparty politics in 1992, Rawlings was elected president on the ticket of his National Democratic Congress (NDC), and again four years later, although the opposition New Patriotic Party (NPP) claimed that both polls had been rigged. The NPP finally prevailed in 2000, with John Kufuor at the helm. In his eight years as president Kufuor helped further consolidate Ghana’s position as a stable democracy with a growing economy that was focused on greater private sector involvement.  

The NDC regained power under John Atta Mills in 2008, a year after a major offshore oil find was made. Located 60km off the western coast, the Jubilee field discovery added to the euphoria of Ghana’s 50th anniversary celebrations, with predictions that Ghana would become an “African tiger”. Atta Mills died in office in 2012, paving the way for vice-president John Mahama to serve as interim head of state. Mahama went on to win closely fought elections later that year.

But as thousands of people poured into Accra’s Black Star Square to celebrate the country’s 58th anniversary earlier this month, their jubilation was overshadowed by the knowledge that all is not well with their nation. Frequent power outages, erratic delivery of other utilities, a devalued cedi and fiscal deficit have created a crisis for the Mahama government, which has led it to seek assistance from the International Monetary Fund. A $1bn bailout agreement to restore fiscal stability was confirmed at the end of last month.

It was a very different picture in 2010 when production from the Jubilee field began. Ghana quickly became one of the fastest growing economies in the world with a growth rate of 14 per cent, and went from Highly Indebted Poor Country status to Lower Middle Income Nation.

Parts of the capital, Accra, began to resemble a building site as foreign business rushed in to establish a foothold in Africa’s new star economy, and Kotoka International Airport could barely cope with the huge increase in arrivals. Meanwhile, upmarket shopping malls – the latest, Accra’s West Hills, is the largest in West Africa – signalled the arrival of a booming consumer culture.

Since then growth rates have more than halved and the heady optimism of yesteryear has mellowed considerably. In 2014, against a backdrop of lower than expected oil receipts, the slide in the price of the country’s main foreign revenue earners, gold and cocoa, and a stubborn budget deficit saw the currency plunging nearly 40 per cent against the US dollar.

The cedi remains in the doldrums and inflation stood at 16.4 per cent as of January. In the meantime, increased business activity has outstripped the supply of energy, leading to power rationing. This has led to long outages for consumers, including industrial users such as mines and manufacturing firms.

As people experience a fall in living standards and resort to candlelight, the mood on the street is one of anger and frustration. In February, the NPP staged a massive two-hour protest in the centre of Accra, with the message “Enough is enough”, a repeat of a mass demonstration it staged in July 2014.

In response, the Mahama government has launched a series of emergency measures to increase the energy supply, which has been pinpointed as one of the main reasons for the deceleration in economic activity during 2014. In his State of the Nation address before parliament at the end of last month, the president outlined at great length the steps his administrations intends to take to increase power generation in the long term, pledging to resolve the deficit by the end of the year.

He then moved on to his Agenda for Transformation, a programme to restructure the economy with an emphasis on exports rather than imports via the real sector, and to enhance the country’s social development through improved health and education and a raft of poverty alleviation and social protection measures.

He also talked about plans to build more infrastructure in critical sectors such as water, roads, transport, ICT and telecommunications. Later he referred to his administration’s plans to boost the tourism sector, a leading foreign exchange earner after gold, cocoa and foreign remittances.

But at the end of the day, it was Ghanaians working together that would secure a brighter future: “We have gone through many challenges as a nation, but our defining spirit as Ghanaians is that we have picked ourselves up each time we have fallen and continued to walk on.”

He added: “We have victory in our DNA. Our quest to build a prosperous, inclusive, free and just society is very much on course in spite of the temporary setbacks of erratic electricity supply and slippages on the macro-economic front … Nation building is a long and arduous task, which can only be undertaken through collective effort … This is the path treaded by those who before us, through sheer valour and sacrifice, sweat and blood, toiled to secure our nation 58 years ago.”

To the casual observer, there is little fundamental difference between Ghana’s two main political parties, although they would dispute this. While the NPP accuses the ruling NDC of economic mismanagement, the government says that some of its problems are unfinished business from previous administrations, like energy generation.

Whatever the truth, with elections looming next year, the government is sure to be focused on making good its various promises while at the same time holding its nerve under fire.

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