Thursday, 6 February 2014

The State of the Nation: The depreciation of the cedi.......

Title: I feel sorry for President Mahama and Ghana
I really felt sorry for a President John Dramani Mahama and Ghana when I heard two members of his administration and NDC political party on an Accra radio station this past Saturday. I wondered, "...are we safe?" These two are senior members of the Mahama Administration gave us all ample reasons why we are where we are with a "see-saw" economy and a suffering people. 
According to one of them, high rise buildings, mansions for a few, the Pokuase road among others are "good" reasons for the fiscal deficits Ghana is facing and the depreciation of the cedi. With "experts" like these in government, who needs reality? And if these are the sort of people influencing what government thinks and does, then I feel sorry for our President and our country. When leaders in places like Dubai are promoting prosperity, thinking ahead and promoting in-bound investment, some of our leaders are blaming developers.

The economic crisis we are flirting with has persisted because people with no real grounding about the economy and business realities keep preventing objective discussion about our problems. They see everything as part of a propaganda battle between the party in power and opposition parties. So everything bad must be painted positive and goats turned into cows so their party does not lose favour with the people. So we discuss the symptoms but not the real fundamental or underlying problems. The election was in 2012 so we should leave propaganda behind and join hands to solve the problems facing us.

The reality is that the cedi, (re denomination or not) has depreciated consistently over the past 20 years, even as the GDP has grown and without regard to Ghana becoming an oil producing nation. We all know the reasons why. We import most of what we eat and use. Then we turn around and export our oil, gold, bauxite, cocoa, cashew, soya, pineapples, banana, timber etc as raw materials. We the people know this fundamental problem so let no one attempt to push blame somewhere else.

We even import services. When our governments need investment banking advice, road construction, legal advice, technology advice, it turns to foreign companies. Our banking rules favour foreign investors over Ghanaians. The same with telecommunications as it is dominated by foreign interests. Foreign hotel chains get tax incentives and local ones like Coconut Grove Hotels a provider of jobs outside Accra, is constantly denied tax incentives. 
Coconut Grove has had to construct its own roads, provide water and electricity infrastructure while it collects significant VAT amounts for the government's Treasury. In Elmina, none of the Municipal Chief Executives PNDC/NDC/NPP has arranged a meeting to discuss the needs of this significant Ghanaian employer or even how to collaborate for local development. And yet tourism is one of the top earners of foreign exchange for the country. The point is, we must support our own to grow and prosper as a prerequisite for strengthening the economy. Discussion on such matters must necessarily exclude political propaganda or else our own people will continue to stand still or worse go backwards.

So it is not the high rise buildings or the fancy buildings. It is not "dollarisation" of the economy. Legislation cannot force people not to want dollars, or euros or pounds as someone high up in the administration has suggested. It is leaving the difficult solutions on the table to engage in win-power-at-all-cost political propaganda that is causing us problems. It is looking for easy solutions where there is none. 
When an MP can say from the floor of Parliament that "...the cedi is appreciating the dollar", it is time to ask government ministers and party communicators to go to practical business and economics school, listen to real 'hands-dirty' Ghanaian entrepreneurs to get some facts and gain courage to implement some solutions.
In addition to solving the energy deficit, the President needs ministers and advisors who will ensure that his administration:

1. Rewards those who invest in our towns and villages with road, water, electricity and tax incentives
2. Gives incentives to those who process and add value to our raw materials
3. Encourages the Bank of Ghana, Securities & Exchange a Commission, National Communications Authority, Insurance Commission and others to favour and strengthen Ghanaian entrepreneurs.
4. Uses the School Feeding Programme to provide a market to our farmers.
5. Uses the state's power to tax to discourage importation of what we produce in Ghana and encourages those who produce manufactured goods in Ghana for export.

Let us push unhelpful propaganda behind, put partisan political games aside and stare at the real, fundamental problem straight, then offer solutions to attack the problems at the root level. What Nkrumah, Busia, Limann, Rawlings, Kufuor, Atta-Mills and others did not do is interesting but is behind us. This is the time of the NDC with John Mahama in front to solve problems.

President Mahama should not mind the "high rise" thinkers.

Ghana Abre!

Papa Kwesi Nduom
February 2, 2014

Nana Aba says: Another day, another sad reality of our sweet motherland Ghana....The free-falling depreciation of the cedi surely is the last straw, or the straw that broke the camels back!!!!!!!!  I am tired and soooooo is Ghana......

No comments:

Post a Comment