Will the Ghanaian government be able to avoid the temptation overspending this election season? Only time will tell.
Abdulkarim Mohammed is the West Africa Regional Program Advisor for Active Citizenship at Oxfam America.
It’s 2016, an election year for Ghana. Come November, Ghanaians will go to the polls to decide either to retain the incumbent President and Members of Parliament or replace them with some of the many contenders warming up on the sidelines with promises of better leadership. Election years in Ghana are truly interesting times to behold. Every time, regardless of the state of the national economy, incumbent leaders and opposition alike make flowery statements and somehow manage to marshal tons of resources to spread around in attempt to retain or gain power. In plainer terms, you might call this phenomenon vote buying. Projects that were on hold for years for lack of funds begin to receive sudden attention and fresh ones spring up from virtually nowhere.
It seems during elections our leaders abide by the repurposed Biblical quotation from Ghana’s first president, Kwame Nkrumah: ‘‘Seek ye first the political kingdom and all others shall be added onto you’’.
Armed with the full knowledge of the weaknesses of politicians, labor unions and others in essential services take advantage of the situation, threatening strike actions if they are not granted a raise or some reprieve. It is not uncommon to come across sign posts in the countryside that read: “No Lights, No Vote” or “No Water, No Vote.” Groups and communities alike use campaign season to get what they need, as if from Santa Claus.
As a result this is the period that off-budget expenditures are at their worst as successive governments have failed to use the budget as a tool for fiscal discipline. So even in times of good economic performance, Ghana has usually emerged from elections with a decline and citizens are asked to tighten their belts with the poor being the worst affected. When things begin to be falling in their right places, elections are used to disorganize them again. This vicious booms and busts have characterized the political business cycle in Ghana and the experience from the immediate past general elections in 2012 bears testament to this fact.
Having rebasing the economy in 2010 to capture new sectors such as oil, forestry and telecommunications, the country’s gross domestic product (GDP) jumped by 60 percent thereby attaining middle income status. Ghana was commended highly by financial institutions like the World Bank in 2011 for its macro-economy management that saw inflation drop significantly from 18 to 8.7 percent, and the fiscal deficit reduced to 4.3 percent of the GDP. The positive trends continued in the following year as oil, cocoa, and gold performed strongly – and pushed Ghana to be the world’s fastest growing economy in 2011.
These positives notwithstanding, the government of the day could not resist the temptation of high unbudgeted public spending pressures during the elections of 2012. As a result, the government rushed to implement a new public sector pay policy (the so-called Single Spine Salary Structure), which cost 75 percent of annual tax revenues, and only benefitted a workforce of about 600,000 without commensurate improvements in public sector productivity & service delivery. As a result of this and other wild spending, by 2013, Ghanaians were faced with an unprecedented budget deficit of nearly 12 percent of GDP. Growth decelerated, public debt rose, and was all made worse by a national energy crisis.
The downward trends continued into 2014 with rising national debt, increasing inflation, shrinking external reserves, plummeting commodity prices, failing public service delivery, and mounting allegations of government corruption and non-responsiveness. The crisis compelled the government to sign up for an extended credit facility from the International Monetary Fund (IMF), after having weaned itself from IMF assistance in 2007. The Ghana-IMF deal was sealed in April 2015 with strong Oxfam supported CSO Platform participation. The deal brought fiscal strictures to keep government on track for economic recovery without entirely sacrificing social and pro-poor investments. Among the key CSO asks of that was accepted as part of the program was the introduction of a Fiscal Responsibility Bill. And while this was an important step, there’s no guarantee that government will not go off track if it feels politically threatened.
This loophole has given both economic watchers and ordinary citizens many reasons for concern as they watch how government will conduct itself this election year. So far, to much public delight, the President has made public pronouncements that he will keep strictly to the budget regardless of the political consequences. In one of such statements, the president referred to the numerous labor strikes he has already survived in his presidency, saying he has developed the “dead goat syndrome” and thus he fears no knife. In other words, he’s seen the worst of election demands and actions already and is ready for the challenge of staying on budget this election season. Now, we’re all wondering: can we take his word for it? Could this be a case of positive defiance?
As my old professor would say ‘‘….in God we trust, all others we monitor.’’ As such, Oxfam, together with our partners, will be keenly engaging citizens, policy makers and public officials to keep an eye on the promise and keep the interests of the nation – and the poor in particular – first. Under our new Budget & Financial Accountability for Inequality Reduction, or B-FAIR initiative, we will be pushing for not just pro-poor investments, but broader public finance issues related to tax structures and exemptions, illicit financial flows, fiscal discipline and sanctions regimes. We will also pay close attention to reports coming out of institutions like the Auditor General and legislative reviews in order to monitor the President’s promise. Political parties will also be engaged to make concrete commitments for fiscal prudence in their manifestos to which they can be held to account.
In all of these efforts, citizens will be at the forefront. We’ll be watching expectantly as election season treads on, hoping this year the government will approach the budget challenge with the stubbornness of a goat, be it dead or alive.