SECESSION: SFG Organises Seminar At Freedom Centre Today

Justice Akufo Henaku

By Ebow Mensah

Following recent threats of secession of the Volta Region and parts of the Northern and Upper East regions, the Socialist Forum of Ghana (SFG) is organising a public discussion on the issue today.

The main discussant will be Comrade Justice Akufo Henaku, a historian and a member of the Central Committee of the Convention Peoples’ Party (CPP).

It will be chaired by Comrade Kwesi Pratt, Jnr. a member of the SFG.

The discussion is expected to focus attention on the history of secessionism in Ghana, Ethnic and cultural identity and the future of a united, secular and democratic republic of Ghana.

The secessionist movement reared its head under the Nkrumah Government with the active support of the broad opposition to Nkrumah.

It was spearheaded by a man called Anto who led TOLIMO (the Togolese Liberation Movement).

The activities of TOLIMO and other separatist ethnic and federalists compelled the Nkrumah government to introduce the Preventive Detention Act (PDA).

Until recently, it was widely believed that secession was dead in Ghana.

Some speculate that the vast natural resources of the Volta Region may be the reason for the new wave of secessionist agitation.

The Volta region is known to have large deposits of oil and gas.

Editorial

MULT-PARTY DEMOCRACY’S HEAD ACHE

The return to multi- party “democracy” in 1992 has not led to the solution of the hydra-headed problems confronting the people of Ghana.

One of such problems is ethnicity or tribalism which appear to be growing out of bounds.

It appears that the character of the political parties which dominate the political land scape.

The fact is that both the National democratic Congress (NDC) and the New Patriotic Party (NPP) are not ideologically and politically different.

They all advocate and implement neo-liberal policies to the detriment of the working people.

As a result of their political and ideological unity, they are unable to present real alternatives to the electorates in elections.

They simply resort to religious, ethnic and other divisions as a means of winning elections.

The Insight warns that ethnicity is a most dangerous political tool and all Ghanaians who cherish real peace and development ought to fight against it.

The only way is to build a true working class movement which would focus attention on class issues and not ethnicity and religion.

Full Text of Joint Statement Following HM the Chief of Morocco’s Official Visit to Ghana

Akufo Addo with Morocco Chief Mohammed

1-   At the invitation of His Excellency Nana Addo Dankwa Akufo-Addo, President of the Republic of Ghana, His Majesty Mohammed VI, King of Morocco, paid an official visit to the Republic of Ghana from 16th to 18thFebruary 2017.         

2-   His Majesty the King was accompanied by a high level delegation which included the Ministers of Foreign Affairs, Finance, Energy, Trade and Industry, Agriculture, and a team of private sector operators and other senior government officials.

3-   The Moroccan delegation was accorded a warm welcome by the government and people of Ghana.

4-   During the official visit, the two leaders held fruitful talks with an atmosphere of conviviality, while the various ministers from both sides held their bilateral discussions. Both parties underscored the need to enhance and diversify the bilateral cooperation in all areas, particularly the economic and trade sectors.

5-   His Majesty King Mohammed VI and President Nana Addo Dankwa Akufo-Addo hailed the first meeting of the joint commission held in Rabat on February 11^th and 12th of 2015, and agreed to upgrade these instruments of cooperation into a genuine partnership between the two countries.

6-   His Majesty King Mohammed VI commended Ghana on its investment policy which turned the country into a major gateway for Foreign Direct Investment in the continent. Both heads of State underscored the necessity to develop a genuine economic partnership that combine public and private sectors initiatives.

7-   President Nana Addo Dankwa Akufo-Addo hailed the contribution of Morocco to the development and stability of the West African region and called for consolidation of the relations between Morocco and the Economic Community of the West African States (ECOWAS).

8-   The two heads of State examined regional and international issues of common interest and commended the convergence of positions of the two countries on the international agenda. They identified numerous areas that would give additional impetus to the Ghana-Morocco cooperation, such as transport, tourism, energy, trade, fisheries and agriculture.

9-   His Excellency the President commended His Majesty the King for the peaceful elections held in Morocco on 7th October 2016, which bore ample testimony to the success of the constitutional reforms introduced by His Majesty the King in 2011. His Excellency also congratulated His Majesty the King for winning the Nelson Mandela Prize of 2016 and for exemplary leadership which had gained recognition on the African continent.

10-His Majesty the King, on his part, also congratulated His Excellency the      President for assuming the high office of the President of the Republic of Ghana and noted that His Excellency's resounding victory at the polls held on 7th December 2016 was an affirmation of the confidence reposed in him by the good people of Ghana as well as a testament to his resilience of character and unwavering commitment to public service.

11-Both leaders acknowledged the longstanding cordial relations between Ghana and Morocco, dating back to the period of liberation struggle in Africa when the founding fathers of the two countries joined forces in the fight against colonial rule.

12- The two leaders reaffirmed their strong commitment and reiterated their determination to further strengthen cooperation on a host of issues of mutual concern. They also agreed that the two countries would hold regular discussions at the senior official’s level as well as support each other in elections at multilateral fora.

13- President Nana Addo Dankwa Akufo-Addo congratulated His Majesty the King for the return of Morocco to its African institutional family and reiterated that Morocco's return would undoubtedly benefit the continent and bring more dynamism into the AU.

14- The two heads of State condemned terrorism and violent extremism in all its forms and reaffirmed the support for regional and international efforts to combat this scourge.

15- The two leaders also expressed their satisfaction over the new impetus to the CEN-SAD and agreed to join efforts for the revitalization of this regional organization, allowing it to play its role in the fields of peace, security, stability and development of its member States, in particular in the Sahel region.

16- President Nana Addo Dankwa Akufo-Addo expressed the interest of Ghana for the creation of the North-West African forum which aims at strengthening consultation between its member States over major issues of common interest in the political, economic, social areas with a view of implementing common global strategies to achieve human and sustainable development of the region. In this regard, the construction of the gas pipeline from Nigeria to Morocco will be beneficial to all the countries of the region it will pass through when completed. This, both leaders believe, is a symbol of South-South cooperation that African countries should promote in order to ensure Africa's model of development as His Majesty has consistently called for.

17 - During His official visit, His Majesty King Mohammed VI was conferred with the "Companion of the Order of the Star of Ghana (CSG)", which is the fight against colonial rule. Highest award for distinguished personalities and also presented with a colorful Kente cloth. On his part, His Majesty King Mohammed VI decorated President Nana Addo Dankwa Akufo-Addo with the Grand Collar of Wissam AI-Mohammadi, which is the highest national award of Morocco. The king also presented President Akufo-Addo with-several gifts.

18- President Nana Addo Dankwa Akufo-Addo and His Majesty King Mohammed VI chaired the signing ceremony of memorandum of understanding and agreements covering various areas such as agriculture, industry, finance and avoidance of double taxation. Both heads of State
called for ambitious Public-Private Partnership (PPP) between the two countries that could serve as model of South-South cooperation in the continent.

19- At the end of the visit, His Majesty expressed His appreciation and gratitude for the warm hospitality extended to Him and His delegation by His Excellency President Nana Addo Dankwa Akufo-Addo and the government and people of Ghana.

20- His Majesty Mohammed VI, King of Morocco, extended an invitation to H.E Nana Addo Dankwa Akufo-Addo, President of the Republic of Ghana, to pay a reciprocal visit to Morocco in the not too distant future, at a date to be agreed upon through the usual diplomatic channels. The invitation was accepted by His Excellency the President of Ghana.

ISSER’S 2017 POST-BUDGET ANALYSIS

"Sowing the seeds for Growth and' Jobs" Budget

Charles Godfred Ackah

Mr. Chairman, Distinguished Guests, the Media fraternity, Ladies and Gentlemen, Good morning.

The Institute of Statistical, Social and Economic Research (ISSER) of the University of Ghana is pleased to issue its official opinion on the 2017 Budget Statement and Economic Policy presented by the Minister of Finance to the Parliament of Ghana on March 2, 2017.

Economists at ISSER have carried out an evaluation of the 2017 Budget Statement and Economic Policy over the last few days and I am delighted to, on the behalf of all my colleagues and on behalf of the Institute, present our analysis and views to the good people of Ghana. We intend to continue with the provision of this useful service as an integral component of our advocacy programme and as a contribution to the development of Ghana.

 .

Macroeconomic Context

The Ghanaian economy has had a history of economic see-saws or business cycles - recessions and recoveries - over the last 60 years. The business cycle is the cyclical movement of the economy through periods of boom and bust. It involves an expansion in economic activity (measured by indicators such as increases in output, employment, and profits) followed by a contraction (downward turn in economic activity measured by indicators like declining production, unemployment, business losses and bankruptcies).

The 2017 Budget has been prepared in a very tough economic environment. These are extraordinary times. The Ghanaian economy is currently experiencing major macroeconomic challenges with slower growth, high internal and external imbalances, and lack of adequate energy supply to support private sector growth. Global conditions have exposed Ghana's own internal structural weaknesses. The cost of doing business in Ghana remains very high, due to significant challenges related to energy, transport, communication, and administrative barriers and exacerbated by the increases in utility tariffs and taxes in the last year of the erstwhile NDC administration.

In the words of the Minister of Finance, Mr. Ken Ofori-Atta, we should all acknowledge that
we have a challenged economy with:

1)   considerable debt overhang and rising interest payments caused by excessive
borrowing;

2)   expenditure overruns and accumulated arrears caused by fiscal indiscipline, excessive
sole sourcing and weak commitment controls;

3)   revenue underperformance caused by leakages, loopholes and tax exemptions;

4)   slowdown in economic growth caused by energy challenges and a lack of an enabling
environment for the private sector; and

5)   limited capital investment, among others, due to rigidities from earmarking of revenues
that severely limit the fiscal space and undermines the prioritization of government
policies.

The Economic Philosophy behind the 2017 Budget

Government budgets serve many purposes in developing countries - to provide for internal and external security, encourage growth, and redistribute income as well as help to manage the economy in the short to medium term. Whenever policymakers seek to influence the economy, they have two main tools at their disposal- monetary policy and fiscal policy. Monetary policy lies in the domain of Central banks, which they employ to indirectly target activity by influencing the money supply through adjustments to interest rates, bank reserve requirements, and the purchase and sale of government securities and foreign exchange. Fiscal policy is a tool in the hands of Finance Ministers used to influence the economy by changing the level and types of taxes, the extent and composition of spending, and the degree and form of borrowing.

The basic Keynesian framework for macroeconomics is the concept that in equilibrium

GDP = C + I + G + NX.

On the left side is GDP - the value of all final goods and services produced in the economy. On the right side are the sources of aggregate spending or demand - private consumption (C),
private investment (I), purchases of koods and services by the government (G), and exports minus imports (net exports, NX). This equation is evidence that governments can affect economic activity (GDP) by controlling G directly and influencing C, I, and NX indirectly, through changes in taxes, transfers, and spending.

We need to emphasize that the 2017 Budget has been mainly anchored on a strong fiscal
stimulus or an expansionary (or "loose") fiscal policy coupled with the usual price stability measures of the Central Bank.

According to the Finance Minister, this Budget "will set the pace for job creation and accelerated growth by empowering the private sector. To accomplish this, we will shift the focus of economic management from taxation to production. This will reduce the cost of doing business and create a conducive climate for investment and job creation. In this regard, a number of taxes that impede growth will be reviewed, and if necessary, abolished. Government will reverse the recent low growth trend by boosting agriculture and industrial productivity" (GoG, 2017).

Expansionary fiscal policy involves government attempts to increase aggregate demand, through either increases in government spending or reductions in taxes and lead to higher economic growth. Expansionary fiscal policy is most appropriate when an economy is in recession and producing below its potential GDP. Expansionary policy can do this by (1) increasing consumption by raising disposable income through cuts in personal income taxes; (2) increasing investments by raising after-tax profits through cuts in business taxes; and (3) increasing government purchases through increased spending on final goods and services.

The role of expansionary fiscal policy gained prominence during the recent global economic crisis, when several governments stepped in to support financial systems, jump-start growth, and mitigate the impact of the crisis on vulnerable groups (lMF, 2008). In April 2009, leaders of the Group of 20 industrial and emerging market countries issued a communique following their London summit, stating that they were undertaking "unprecedented and concerted fiscal expansion". The Obama administration and Congress, for example, passed an $830 billion expansionary policy in early 2009 involving both tax cuts and increases in government spending,

The 2017 Budget

The Real Sector

The rate of economic growth has slowed down in recent times, with 2016 growth estimated at 3.6 percent, the lowest in over two decades. In fact, this is the first time we are witnessing five consecutive years of consistent year-on-year decline in economic growth (Figure 1).

Figure 1: Annual Real GDP Growth (%), 2008-2016 

The economy is projected to expand by 6.3 percent in 2017, with non-oil GDP growing at 4.6
percent over the period. The central plank of the 2017 National Budget is the increase in economic growth resulting essentially from the revival of the oil and gas industry. The industry which suffered a negative 11.2% growth rate in 2016 is expected to drive growth based on an expected whopping 30.2% growth rate.This very high growth rate is due to the expected coming on stream of the production of new oil fields and increased production of gas from the Atuabo gas plant.

Another aspect of the high growth rate of the oil and gas industry is due to the expected
completion of repair work on the 2016 damage on the turret bearing on FPSO  Kwame  Nkrumah using a three-phase approach to covert the facility to a permanent spread-moored one. Hence the expected growth rate of the oil and gas industry would also critically depend on the success of this repair work.

The questions we pose are: Are the underlying assumptions about the turnaround of the oil and gas sector realistic? What are the downside risks? How inclusive will this growth be and how will it reduce poverty and inequality?

Fiscal Developments

2016 Fiscal Performance

Fiscal targets, as with almost all election years, were missed in 2016. This was not entirely unexpected even though we were in an IMF programme.

• As a share of national income, government spending peaked at 37 percent following the 2012 elections. Since then, however, spending fell sharply as a share of GDP, until 2015 in preparation towards incumbency advantage in the 2016 elections (Figure 2).
• On a cash basis overall target was a deficit of 5% of GDP but the realized was 8.7% (3.7 percentage points difference).
• On a commitment basis the target was a deficit of 3.7% of GDP but the realized was
  10.3% (6.6 percentage point’s difference).

Figure 2: Government Spending and Revenue as share of GDP, 2002-2016

Even though both expenditure and revenue contributed to this slippage, the magnitude of the slippage was much higher for expenditures, which was GHS7.1 billion as compared to GHS4.2 billion for revenue and grants.

• Expenditure target was 26.4% of GDP but realized was 30.3% of GDP
• Revenue and grants target was 22.7% of GDP but the realized was 20% of SGDP.

From the revenue side, the slippage came mainly from direct taxes, where company taxes and also personal income taxes experienced key slippages. The other important component of the revenue slippage was from international trade taxes.

• Firstly, this suggests that the inability to grow jobs and income of the average working person is what largely accounted for the revenue shortfall.
• Secondly, the emphasis on taxes to expand the fiscal space was probably sub-optimal.

Tax revenue targets were largely missed.

From the expenditure side, the largest slippage (in terms of magnitude) came from other outstanding expenditure claims which previously had not been planned for. These were expenditures classified as goods and services and capital expenditure. These contributed about 45% of the total absolute deviation (i.e. slippage).

• For almost all the statutory funds, the actual expenditures were less than the planned (the only exception being an item called 'Other earmarked funds').
• The next two biggest contributions to the deviations were capex and expenditures on goods and services (contributing 11.6% and 9.8% respectively)
• So, generally government'soverspending came from unbudgeted outstanding claims, capital spending, and on goods and services. These items very much lend themselves to the hypothesis that electoral cycles tend to drive indiscipline in the fiscals.

2017 Fiscal Projections

The overall fiscal deficit is expected to be decreased in 2017 - from the 2016 levels of8.7% to about 6.5% on a cash basis and from 10.3% to 4.6% on a commitment basis. This will be explained by an improvement in the proportion of GDP that government will get as revenue as well as what government will spend out of this expenditure.

• Total revenue and grants is expected to increase from about 20% in 2016 to about
  22.1 % in 2017.
• Meanwhile expenditure is expected to decrease from 3.0.3% in 2016 to 28.6% .

Our Conclusions on Fiscal Developments and Policies

In hard times like this, a Minister of Finance would try to strike a balance between different objectives, in particular creating revenues and avoiding adverse effects on economic growth. We note that Minister Ken Ofori-Atta has chosen the path of "sowing the seeds for growth and jobs" in the hope that the future expansion of production would create the needed fiscal space to increase government revenues. This seems rational because the economy is currently producing (growing) below its potential. The status quo seems irrational because there is great need for goods and services, yet millions of people (including the youthful population, many with degrees and diplomas) are jobless. Society suffers many types of losses from economic downturns, including business losses, in which businesses cannot sell their goods and services at a profit (hundreds or probably thousands of small businesses have been forced out of business by the prolonged 'dumsor' and economic downturn), and the human suffering of the unemployed and their families'. Often, increased unemployment and economic insecurity are associated with increases in alcoholism, divorce, crime, and even suicide.

At a very broad level the budget has done a few interesting things:

• First, there has been an attempt to incentivize production and growth through the many tax incentives. We hope that these tax cuts are not meant to bring patronage and popularity to the new government.
• Second, the budget has been bold and tackled the issue of fiscal space by relaxing, to some degree, the rigidities imposed by the many statutory funds.
• Thirdly, there has been a very bold attempt to reprioritize spending - i.e. funding of the many policies such as the Zongo Development Fund, Free SHS, One district one
  factory, etc.

Generally these are positive measures as they have been done with an eye on improving fiscal deficits. There are a number of challenges, of course:

• First is, whether the government can remain disciplined, fiscally.
• Second, it would be important for economic managers to balance the need for more
  priority spending with fiscal sustainability and other macroeconomic considerations.

1 Ghana has suffered its worst power crisis in history, which plunged millions of households and enterprises into darkness for
almost four consecutive years. Because the supply of electricity is unreliable and insufficient, many industrial firms rely on
their own or shared generators, which run on diesel. The market price of diesel is expensive and as a result independently
generated electricity is costly compared to power supplied through the grid. Conservative estimates by researchers at ISSER
suggest that shortages is currently losing. production worth about US$2.2 million per day just owing to the electricity crisis
alone.

• Third, whether the realignments in the fiscals will yield the anticipated efficiency.

Economic managers need to focus on the quality of investment and efficiency in overall government spending. Spending quality is important because past experiences have shown that public investments may fail to boost growth, if spending efficiency is compromised. We should not forget that improving efficiency requires that you prioritize appropriately and also reduce corruption.

• Fourth, whether growth (with employment creation) will be engendered by these many incentives. There can be no denying the fact that these incentives have the potential to restore consumer and investor confidence about the economy. The challenge, however, is the extent to which the private sector will respond to the incentives signaled by the budget.

The Monetary Sector

2016 Performance

The year 2016 ended with a Monetary Policy rate of25.5% and an inflation of 15.4% by end December 2016 with the decline driven mainly by non-food factors and the relative stability in the local currency. Credit to the private sector also recorded slower growth resulting from the tight monetary policy with M2+ recording an annual growth of 22.0% in 2016 compared to 26.1 % recorded in the preceding year. Lending risk continued to surge with growth in total outstanding credit to the private sector declining from 24.9% in 2015 to 17.6% in 2016.

Similarly, in 2016, credit to the private sector grew by 14.4 percent year-on-year, against 24.5 percent recorded in 2015. In real terms, private sector credit contracted by 0.8 percent in December 2016, compared to a growth of 5.8 percent recorded in December 2015. This development is quite worrying given that historically, financial intermediation has been low in Ghana compared to comparator economies (Figure 3). We dare say that this has something to do with the relatively high interest rate spread in the country and the general economic downturn witnessed over the last five years. It is not surprising then that non-performing loans have risen sharply since 2014 (Figure 4). This is symptomatic of a struggling economy and a looming banking crisis. We need appropriate regulation of the financial system to achieve the twin goals of inclusive growth and financial stability.

 

The Stock Market also suffered some negative movements with the GSE Composite Index declining by 15.3% while Total Market Capitalization also suffered a decline of7.8%. Interest rates on the money markets recorded a decline in the short term instruments while longer term instruments recorded some marginal increases. Average 3-month time deposit rates remained same while savings rate declined marginally. Meanwhile, average lending rate increased from 27.5% in December 2015 to 31.2% in December 2016 reflecting the increased default risk and general cost of doing business.

The Exchange rate remained relatively stable due to the tight monetary policy stance and improved inflow of foreign exchange but this was short-lived in the run-up to the December 2016 elections due to demand pressures and some market speculations. A depreciation of 9.6% and 5.3% against the US Dollar and the Euro was recorded in 2016 compared to a cumulative depreciation of 15.7% and 6.2% in 2015.

2017 Monetary Projections

In 2017, prudent monetary and external sector policies have been proposed to complement the fiscal stance in order to ensure price and exchange rate stability. Average inflation target of 12.4% has been earmarked with a medium term (2018-2019) target of 8±2 %. It is expected that the fiscal stimulus package coupled with the fiscal consolidation process to reduce the deficit to 6.5% of GDP will have positive implications on the exchange rate. In addition, increased oil production from the new oil fields as well as improvements in non-traditional export receipts and expected improvements in remittance flows is likely to build up foreign exchange reserves and bring some stability to the exchange rate.

It is expected that these measures will result in a moderate Money Supply (M2+) growth of 19.6% and reducing further to 15.6% by 2019. End of Year Inflation is also expected to decline to 11.2% in 2017 and further to 8±2 % during the period 2018-2019 all things being equal.

Our Conclusions on the Monetary Sector

The outcome of the 2017 Policy Initiatives on the monetary sector greatly hinges on the success of the fiscal stimulus, which is expected to increase private sector activities and lead to increases in GDP resulting from increases in tax revenue (Tax Buoyancy). Given the expected revenue increase of 33.6% and a GDP growth of 6.3% in 2017, this comes to a tax buoyancy rate of ') which is on the high side according to TMF Estimates (2017)

2017 Monetary Projections

In 2017, prudent monetary and external sector policies have been proposed to complement the fiscal stance in order to ensure price and exchange rate stability. Average inflation target of 12.4% has been earmarked with a medium term (2018-2019) target of 8±2 %. It is expected that the fiscal stimulus package coupled with the fiscal consolidation process to reduce the deficit to 6.5% of GDP will have positive implications on the exchange rate. In addition, increased oil production from the new oil fields as well as improvements in non-traditional export receipts and expected improvements in remittance flows is likely to build up foreign exchange reserves and bring some stability to the exchange rate.

It is expected that these measures will result in a moderate Money Supply (M2+) growth of 19.6% and reducing further to 15.6% by 2019. End of Year Inflation is also expected to decline to 11.2% in 2017 and further to 8±2 % during the period 2018-2019 all things being equal.

Our Conclusions on the Monetary Sector

The outcome of the 2017 Policy Initiatives on the monetary sector greatly hinges on the success of the fiscal stimulus, which is expected to increase private sector activities and lead to increases in GDP resulting from increases in tax revenue (Tax Buoyancy). Given the expected revenue increase of 33.6% and a GDP growth of 6.3% in 2017, this comes to a tax buoyancy rate of ') 1? Which is on the high side according to TMF Estimates (2017)

Agriculture Sector

Key constraints and what was done in the past

Agriculture sector constraints could be grouped under three broad areas and one cross-cutting area: production; storage, processing and marketing; consumption; and finance. On production, the main issues relate to the productivity of factor inputs. These include low and declining soil fertility, an ageing farmer population, and low application of mechanization (including irrigation). On storage, processing and marketing side, we have low quality produce due to poor post-harvest handling and storage infrastructure, high transportation and transactions cost, and minimal value addition. Some of these create high inter-seasonal price bands which negatively impact the welfare of the population in general and that of farmers in particular. On the consumption or demand side we have the issue of taste and preference for imported goods. Finally, we have the cross-cutting issue of inadequate finance and investment."

Are there new proposals to addressing the constraints?

The important question is whether the 2017 budget statement and economic policy of the GoG contains proposals that could address the constraints facing the sector.

Government's policy objective for the sector in 2017 (and the next four years) is to "modernize agriculture, improve production efficiency, achieve food security and profitability of farmers, all aimed at significantly increasing agricultural productivity" (GoG, 2017, p.68). While this is a sound policy objective, there is clearly nothing new about it. Agricultural modernization has been the key objective of all governments since independence in 1957. Most of the policy proposals aimed at achieving modernization are essentially repetitions of previous policies.

However, the "Planting for Food and Jobs" campaign (PFJC) is one that on the surface appears innovative. This campaign aims to focus on maize, rice, soybean, sorghum and vegetables. The PF J C in its current form in the budget lacks a clear implementation plan. Most of the pillars upon which the campaign hinges (e.g. provision of improved seeds, supply of fertilizers) already exist in government policy documents. Without a clear plan for implementation it would be difficult to evaluate the performance of the PFJC in meeting the targets set (i.e. increasing the production of maize, rice, soybean and sorghum by 30%, 49%, 25% and 28%, respectively). How could increases in the production of these crops be attributed to the PFJC? How would the number of jobs created (an estimated 750,000) by the campaign be measured without a detailed implementation plan? Relatedly, it sounds quite ironic that the policy aims
at importing any shortfalls in seeds that might arise for the production of the stated crops under the PFJC. One would have thought that existing seed producers would be supported to increase their production, something that can be achieved in the short run.

Again, on paper, the "One Village One Dam" campaign (OVODC) which could benefit the agriculture sector sounds novel. In the 2017 policy statement the objective under the OVODC is the rehabilitation of small to medium scale irrigation schemes. What is important to note is that nearly every budget over the period of the 4th republic contains an agenda to rehabilitate dams and irrigation schemes. The problem has always been with execution.

Given the policy agenda of agriculture modernization it is surprising that the only target under the "Science and Technology in Food and Agricultural Development Programme" for 2017 is continuation of the Fertilizer Subsidy Programme (FSP). There are many other aspects of Science and Technology in agriculture that could be explored. An example is investment in the 9 development of drought, insect and disease resistant crop varieties, among others. Currently, most of the funding for such technological innovations comes from agencies other than GoG.

In order to deal with constraints from the consumption side, the policy states that consumption will be directed towards locally produced produce and substitutes through government schools, hospitals, and security agencies. This is not the first time such proposals are being tabled. One will have to carefully monitor its implementation.

Given the role of cocoa in Ghana's economic history, a special mention of the crop is warranted. We note government plans to review CODAPEC and the Hi-Tech programmes. These programmes have been fraught with alleged corruption and political patronage (Banjul, 2011). Only time will tell how the proposed reviews would make a difference in the cocoa sector in terms of reducing the alleged patronage and boosting production.

The key innovation in the 2017 budget for the cocoa sub-sector is the proposed introduction of solar-powered pump irrigation for the 20 17118’ cocoa seasons. Aside rain water harvesting; this is essentially possible where water is available in rivers and dams. Yet, the destruction being caused to water bodies by artisanal sand small scale mining in cocoa growing areas could be a major challenge to the scaling up of such an innovation that could boost cocoa production.

How does the government plan to finance investments in the agriculture sector?

Areas related to agriculture are spread across a number ofMDAs but we focus on MoFA here. We note that only 1 % of total MDA expenditure allocation is earmarked for MoFA. While only 7% of total MDA expenditure allocation is expected from Development Partners' Funds, 49% of MoF A's total expenditure is expected from the same source. This underscores how dependent Ghana's agriculture sector is on donor funding. In fact, most of GoG funding goes \directly into compensation of employees. Importantly, only 17% of the total MoFA budget is allocated to capital expenditures, translating to around US$30 million (or about 60 modem combined harvesters). Whether this amount is sufficient for breaching the agricultural finance gap or not is not clear because the exact gap in agricultural investment financing is not known.

Our Conclusions on the Agriculture Sector

The 2017 agriculture sector policy statement of the GoG sets out to "reverse the recent low growth trend by boosting agriculture and industrial productivity". Yet, projected agriculture growth for 2017 is set at a rate that is slightly lower than the estimated rate in 2016 (3.5% compared with 3.6%). This simply means that the government expects some lag between policy implementation and the realization of benefits thereof. But it must be noted that with Ghana's current agriculture architecture (dominated by smallholders producing under rain-fed conditions), agriculture sector growth projections are still at the mercy of the weather, not science and technology application, unfortunately.

Most of the policy proposals aimed at modernizing and transforming agriculture and the
economy of Ghana have been in policy documents since independence from colonial rule. What is left to be done is effective implementation and monitoring. In order to breach the agricultural investment finance gap it has to be clear exactly what the magnitude of the gap is so that adequate resources could be directed towards the transformation agenda. As part of the Infrastructure for Poverty Eradication Programme (IPEP), US$1 million has been earmarked Per constituency, and part of this amount is targeted at agricultural inputs, including equipment. The Ghana Incentive-Based Risk-Sharing System of Agriculture Lending (GIRSAL) also aims at increasing lending to selected agriculture sub-sectors. Because similar attempts have been made in the past without much success, one has to adopt a 'wait-and-see' posture towards the policies and plans contained the 2017 budget statement and economic policy of the Government of Ghana.

Education

Under the 2017 Budget, the government will continue with policy actions to improve access and quality of education especially in the basic education sector. In 2016, actual expenditure on basic education exceeded the target allocation ofGH¢3,390.46 million by almost 50 percent. In 2017, an amount of GH¢7,382.79 million is allocated for the Education sector, with about 58 percent allocated to basic education.

In 2016, the government spent an amount of GH¢71.91 million for the provision of subsidies to Senior High Schools (SHS) and GH¢25.96 million for the implementation of the Progressively Free SHS. To fulfill the new government's mandate of free secondary education, the government intends the absorption of all approved fees currently charged to students in public Senior High Schools with first ear students from September 2017/18 academic year.

In principle, this is a policy in the right direction but we have some questions on the scope and speed of execution. And, it is still not clear how much this will cost the government in subsequent years as new cohorts join the stream.

The questions we have include the following:

• Could have deferred the start of this policy to a later date?
• Could proper targeting of disadvantaged schools and households be done instead of its universality?
• Do we have the requisite facilities and human resources to contain the expected
  increases in enrolment?

·         Will quality not be compromised?

Concluding Remarks

Mr. Chairman, Fellow Ghanaians, Ladies and Gentlemen,

Ghana turned 60 years this week. Until very recently, Ghana was touted as a success story on the African continent, achieving high and sustained growth and impressive poverty reduction. The country's economic growth rate had consistently outperformed that of its African counterparts since the early 1990s, bringing the country into lower-middle-income status. However, growth has not been accompanied by a structural transformation that lifts workers from low-productivity jobs in the informal sector to higher-productivity activities in the formal sector. A large part of the growth of the last two decades has been propelled by booming prices of its main commodity exports (cocoa and gold, whose prices more than tripled between 2000 and 2010) and the start of commercial oil production in 2011. Notably, no serious effort has been made in recent times to use the recent commodity-based growth to start a more sustainable growth based on the development of the manufacturing sector, including but not exclusively the processing of primary commodities. It is ironic that for all these decades since independence from colonial rule, Ghana continues to export raw cocoa beans with limited upgrading within the value chain (e.g., making cocoa butter and powder instead of exporting cocoa beans). As such, the growth performance, thus far, remains highly vulnerable to external shocks and has not translated into meaningful job creation.

Undoubtedly, industrialization remains critically important to our march towards economic transformation prosperity. Since the industrial revolution, almost every country that has managed the transition from low to high income has undergone industrialization, especially in Asia, in their low-income stage of development. Indeed, no country, except a few exceptionally rich in oil (e.g., Qatar, Kuwait, Brunei) or very small financial havens (e.g., Monaco), has achieved high and sustainable standards of living without developing a significant manufacturing sector/. Many Asian economies have attained high manufacturing output shares. Asian Tigers like China, Thailand and Malaysia all had targeted export-oriented light manufacturing in their march towards economic transformation.

Today, while manufacturing accounts for around 20-30 percent of GDP for most successful countries, manufacturing value added is at a dismal 5 percent of GDP in Ghana. As a share of GDP, the manufacturing sector has continued to decline steadily over the last 40 years when it contributed about 14 percent of GDP in the mid-1970s. Given the small size of the manufacturing sector in Ghana, it is not surprising that manufacturing exports are not an important source of export earnings. While more than three-quarters of Thailand's exports are manufactures, less than one-fifth of Ghana's exports are manufactured goods.

In conclusion, Mr. Chairman, we should definitely encourage initiatives aimed at "sowing the seeds for Growth and Jobs". The Bible puts it cogently in the book of Psalms 126:5-6 like this:

"They that sow in tears shall reap in joy. He that goeth forth and weepeth, bearing precious seed, shall doubtless come again with rejoicing, bringing his sheaves with him. “The budget is bold but its success will depend on a number of conditions, including the quality of the seed and the ground, the skillfulness, diligence, and faithfulness of the sowers, and more importantly the benevolence of God in sending the rain when it is most needed.

Finally, we hope and pray that there are no greedy 'birds' in or around government circles that would eat up the seeds. It is also our prayer that there would be no 'locusts' on the other side waiting to attack and destroy the fields.

Now, may God who supplies seed to the sower and bread for food, also supply and increase our store of seed and enlarge the harvest of our righteousness.

God bless our homeland Ghana and make our nation great and strong.

Thank you for your attention. 

Charles Godfred Ackah, PhD

Senior Research Fellow & Head of Economics Division
Institute of Statistical, Social & Ec6nomic Research (ISSER) University of Ghana, Legon.

10 March 2017

See UNECA (2016), "Transformative industrial policy for Africa". Addis Ababa, Ethiopia.

MORE WORLS DISCOVERED
The world as we know it is a very small part of our universe which is itself a small part of galaxies.

The indications are that space is getting crowded.

A new study published in the Astrophysical Journal finds that the previous estimate of the number of galaxies in the universe is at least 10 times too low.

There are an estimated 2 trillion galaxies sharing the known universe with ours, it was announced, and 90 percent of them are too faint and too distant to be observed by current telescope technology.

Astronomers are pretty sure they’re there, however, through the use of models and other calculations. 

The new data is giving astronomers a peek into the deep, deep past: some 13 billion years ago, near the dawn of the universe. We are talking about space in the context of the "observable universe," the portion of the cosmos through which light has had time to travel to reach Earth.

So, as astronomers look farther, they are also looking backward through time. And if we suddenly have lots of new galactic neighbors, it turns out that, back near the beginning, it must have been shoulder-to-shoulder out there, with a density of galaxies 10 times greater than there is today.

The early universe appears to have been jam-packed with little clusters like the satellite galaxies that hover around our Milky Way, a Hubblecast video about the project explains. This insight provides evidence that galaxies evolve and grow by merging together as they spin through space, creating larger galaxies, but fewer of them.

The sudden, explosive increase in the number of galaxies means a number of other hypotheses about space will have to be rethought, Popular Mechanics points out. Equations that estimate the number of possible alien civilizations out there, for example, will need to be modified.

The new paper results are the product of 15 years of work that began with a Royal Astronomical Society (RAS) research grant to have an overworked undergraduate student count galaxies.

Eventually, University of Nottingham Astrophysics Professor Christopher Conselice and an international team of researchers from Leiden University and the University of Edinburgh converted that research, plus data from telescopes including Hubble, into 3D maps.

They could then use mathematical analysis to calculate the number of galaxies that could not be seen by telescopes into those maps, and then do that for one region of space after another, one period of time after another, "like an intergalactic archaeological dig," a news release by the RAS comments.

"The number of galaxies in the universe is a fundamental question in astronomy, and it boggles the mind that over 90 percent of the galaxies in the cosmos have yet to be studied," said Conselice, who led the international team of researchers, in the RAS press release. 'Who knows what interesting properties we will find when we study these galaxies with the next generation of telescopes?"

Trump and Netanyahu “Co-Conspirators”: Embracing Illusions, Ignoring Reality

Donald Trump and the globally wanted war criminal Netanyahu Benjamin

By Dr. Alon Ben-Meir, Global Research

President Trump remained true to his customary flip-flopping on just about every issue when he stated during a joint press conference with Prime Minister Netanyahu that he is “looking at two-state and one-state, and I like the one that both parties like… I can live with either one.” By stating so, Trump gave Netanyahu what he was hoping to get—a departure from the two-state solution.

To achieve that, Trump is reportedly looking at other options that would enlist the Arab states—who presently share mutual strategic interests with Israel to form a united front against their common enemy, Iran—to help broker a solution to the Palestinian problem.

To be sure, the two leaders who are both in trouble—Netanyahu is under multiple criminal investigations for corruption, and Trump is being attacked from just about every corner for his outrageous statements, contradictions, and self-indulgence—found comfort with one another.

Netanyahu went back home feeling triumphant, as he seemingly managed to sway Trump from the idea of two states, while Trump presented himself as a statesman thinking out of the box by looking at an Israeli-Arab comprehensive peace through which to fashion a solution to the Palestinian conflict.

Although CIA Director Mike Pompeo met with Mahmoud Abbas the day before the press conference, I was told by a top Jordanian official in Amman that Abbas was abundantly clear during the meeting that there is not and will never be an alternative to a two-state solution based on the Arab Peace Initiative (API). Moreover, Abbas indicated that Hamas’s position on a two-state solution is unequivocal, and in any case, Gaza and the West Bank must constitute a single Palestinian state.

While Netanyahu often pretended that he still believes in the two-state solution, during the many encounters he had with former Secretary of State John Kerry (including a joint meeting with Egypt’s President Sisi and Jordan’s King Abdullah in Aqaba in 2016) where he was presented with a comprehensive peace plan, he repeatedly changed his position.

Netanyahu habitually claimed that his extremist right-wing partners oppose the creation of a Palestinian state under any circumstances and that his government would collapse if he were to actively pursue the idea, as if he could not form a new government with the left and center parties who are committed to a two-state solution. Nevertheless, he continued to sing the song of two states for public consumption and to get the Obama administration off his back.

Regardless of what new ideas Netanyahu and Trump concocted, one thing remains certain: there is simply no other realistic solution to the Israeli-Palestinian conflict other than two independent states, Jewish and Palestinian.

The viability of this solution does not only rest on preserving Israel as a democracy with a Jewish national identity while meeting the Palestinians’ aspiration for a state of their own. A careful scrutiny of other would-be alternatives floating around have no basis in reality.

Jordan is not and will never become a Palestinian state (as some Israelis advocate) because the Hashemite Kingdom will resist that with all its might; a binational state is a kiss of death to the Zionist dream; the establishment of a Palestinian state in Gaza while incorporating much of the West Bank into Israel is a non-starter; the creation of a federation between Israel, Jordan, and Palestine is a pipe dream; and finally, confining the Palestinians in the West Bank in cantons to run their internal affairs as they see fit, while Israel maintains security control, will be violently resisted by the Palestinians until the occupation comes to an end.

It is true that the Arab states view Israel today as a potential ally in the face of the Iranian threat, and there may well be a historic opportunity to solve the Israeli-Palestinian conflict in the context of a comprehensive Arab-Israeli peace. This opportunity, though, can be materialized only in the context of the API.

The central requirement of the API is a settlement to the Israeli-Palestinian conflict based on a two-state solution, which would subsequently lead to a regional peace. Indeed, only by Israel first embracing the API will the Arab states lend their support to a two-state solution by putting pressure on the Palestinians to make the necessary concessions to reach a peace accord.

Those who claim that the two-state solution has passed its time and new and creative ideas should be explored must know that many new ideas have been considered. None of them, however, could provide a solution that meets the Israelis’ or the Palestinians’ requirement for independent and democratic states enjoying Jewish and Palestinian national identities, respectively.

Netanyahu has found in Trump a co-conspirator. Both have a proven record of double talking, misleading, and often outright lying. Both are blinded by their hunger for power and are ready and willing to say anything to please their shortsighted constituencies. Neither has the vision or the courage to rise above the fray, and nothing they have uttered jointly meets the hardcore reality they choose to ignore.

What Netanyahu and Trump have demonstrated during their press conference was that both seem to revel in illusions where they find a zone of real comfort, while leaving Israelis and Palestinians to an uncertain and ominous future.

Dr. Alon Ben-Meir is a professor of international relations at the Center for Global Affairs at NYU. He teaches courses on international negotiation and Middle Eastern studies.
alon@alonben-meir.com                            

Web: www.alonben-meir.com

The original source of this article is Global Research