 |
| President John Dramani Mahama |
The
London-based influential magazine “Africa Confidential” is predicting that
President John Dramani Mahama can win the 2016 elections.
The
prediction was in an article headed “A Helping Hand from the Washington Twins”
published in the magazine’s September 10, 2015 edition.
The
relevant portion of the article reads “….Mahama’s prospects of victory in next
year’s elections are higher after this annus horribilis, thanks both to local
political machination and help from the
International Monetary Fund and the
World Bank in Washington.”
The
article dwells at some length on the
internal battles in the opposition New Patrotic Party (NPP) and the allegations
of corruption in the party.
The
full text of the article is published below:
Cash
And Lobbying From The IMF And World Bank Boost The Government A Year Before
Elections
Smiling
broadly and sporting his trademark northern smock, on 7 September John Mahama
submitted his application in Accra to stand again as the governing party's
presidential candidate in next year's election. Having sidelined most of the
National Democratic Congress dissidents, Mahama is likely to sail through the
NDC party primaries.
After
the party formalities, Mahama received Nigerian President Muhammadu
Buhari for discussions on regional security cooperation. Buhari's
victory in March against an incumbent president has fired up opposition hopes
in Ghana. Mahama then flew off to Germany to address the Fifteenth
International Economic Forum on Africa in Berlin on 8-9 September, where Ghana
was again held up as one of Africa's brighter prospects amid concern at China's
slow down and the international commodity price crash.
One
reason for Mahama's good humour is that his government has managed to steer its
way through one of worst years of economic travails since the 1980s: worsening
power cuts, devastating floods, inflation soaring to 17% in June, ballooning
foreign debt, and opposition claims of unprecedented political and business
corruption. Bizarrely, Mahama's prospects of victory in next year's elections
are higher after this annus horribilis, thanks both to local political
machinations and help from the International Monetary Fund and the World Bank
in Washington.
Firstly,
the opposition New Patriotic Party is undercutting itself by a succession of
internal disputes in which rivals have enthusiastically destroyed each other's
reputations live on Accra's radio stations (AC Vol 55 No 15, Letting a crisis
go to waste). The NPP's General Secretary, Kwabena Agyepong, is
lambasting the presidential candidate, Nana Addo
Dankwa Akufo-Addo. Meanwhile, police are investigating complaints
that some senior officials have misused party funds.
Venality
and mismanagement
All this has crowded out the campaign about the government's venality and
mismanagement by Akufo-Addo and his able running mate, Mahamudu Bawumia, a
former Deputy Governor of the Bank of Ghana. Although Mahama boasts of success
in fighting corruption, the government agency for this, the Commission on Human
Rights and Administrative Justice (CHRAJ) has been almost paralysed by
administrative disputes and a chronic lack of resources. Accusations of grand
corruption in the award of oil blocks and the much-delayed gas processing plant
at Atuabo (AC Vol 55 No 18, Popping the
gas balloon) go uninvestigated, as do claims about horrific labour
abuses in the mining sector and complicity in drug smuggling by some security
officers.
For
now, the opposition parties' biggest battle is their campaign to get a new
electoral register. They reckon the existing one is inflated by over a million
names: the population is about 26 million and the median age is 18, meaning
that if every eligible Ghanaian registered, there would be about 13 mn. names.
The governing NDC, which has a formidable electioneering apparatus, especially
when in power, dismisses the arguments saying it is too late and too costly to
draw up a new register.
Christine
Osei, appointed to chair the Electoral Commission in June, says the register's
accuracy will be assessed. Civil activists, such as Emmanuel Akwetey of the
Institute of Democratic Governance, who was at one stage tipped for the EC job,
argue that the register should be reviewed by an independent task force,
drawing on academics and civil society.
A
new alliance known as 'Let my vote count' is organising protests in Accra and
Kumasi adding to the pressure for a new register. It also wants to see the EC
adopt the reforms proposed by the special judicial panel on the 2012 elections,
which spent eight months assessing opposition claims of massive fraud in the
presidential vote won by Mahama. But by a majority vote, the panel of judges
upheld Mahama's election.
This time political tempers are even hotter and the economic situation is much
tougher. That second factor has given the IMF and World Bank a key role in
Ghana which has been following economic reform programmes for the past three
decades.
At
the height of the current problems, the IMF has agreed a US$900 million credit
to bolster state finances and, more spectacularly, the World Bank is offering a
$700 mn. guarantee which it hopes will generate the $7.9 billion that Ghana
needs to build the Sankofa gas project. Using local gas, the plant will
generate some 1,000 megawatts of electricity and cut costly fuel imports and
reduce carbon emissions.
Paradoxically,
the companies to benefit from the Bank's guarantee will be Italy's ENI and the Swiss-based
oil trader Vitol; but both companies have been plagued by a succession of
accusations of malfeasance and trade mispricing operations, especially in
Africa.
Finance
Minister Seth Terkper presents this combined package as a tremendous vote of
confidence in Ghana. He will need every ounce of confidence this month in his
campaign to float another eurobond. This time he's looking for $1.5 bn., just
as a stronger United States dollar and prospects of a US interest rate rise are
drawing money away from emerging markets.
Indeed
one banker told us of diminishing commercial interest in Ghana, arguing that
IMF, World Bank and African Development Bank would be playing a bigger role. Peter
Enti of Nubuke Investments suggests that successful elections in Nigeria and
perhaps in Côte d'Ivoire next month, could reduce he value of Ghana's
reputation for political stability.
The
IMF projects reduced growth in gross domestic product of around 3.5% this year
and a persistently large fiscal deficit of over 7% of GDP. Adding to the
problems are an interest rate of a hefty 22%, determined by the central bank.
This is accompanied by costly local borrowing rates, falling gold prices,
government debt to the fuel and power sectors, and lower cocoa production this
year.
Although
the World Bank's financing help for Sankofa will boost electricity production
in the medium term, before that, the power sector needs extensive reform and
restructuring, says Franklin Cudjoe of the Accra-based IMANI Centre for Policy
and Education. He backs private sector involvement in the state-owned
Electricity Company of Ghana, which Mahama is trying to push through in the
teeth of trades union opposition.
IMANI
has just rated the NDC's delivery record on its 2012 election manifesto at 47%
or significantly below average. Conditions for the IMF credit include other
policy shifts, such as freezing public sector wages as well as new borrowing at
home and overseas. There are also tougher restrictions on the central bank's
ability to finance the government deficit.
Renaissance
Capital economist Yvonne Mhango says this IMF restriction on Bank of Ghana debt
monetisation is critical. Although Ghana might miss the IMF's fiscal deficit
reduction targets, an overshoot of 1% or less would still represent progress
and not spark major concern over the government's commitment to fiscal
tightening. IMF confidence is reflected by its positive assessment in June and
its approval of Ghana's planned $1.5 bn. Eurobond, which will be partially
guaranteed by the World Bank, she adds. On the downside, Mhango emphasises that
the approximately $500 mn. that the government owes to bulk distribution
company (BDC) fuel importers needs resolution.
With
about a third of the Eurobond funds used to retire outstanding instalments on
Ghana's first Eurobonds, the remaining $900 mn. should provide a boost to state
finances. In his address to Parliament on 21 July, Terkper said this year's
deficit target would rise to 7.3% from 6.5%, and the growth target would fall
from 3.9% to the IMF's predicted 3.5%. Terkper added that developing the
Tweneboa, Enyenra and Ntomme (TEN) fields was '57% complete' and would supply
oil and gas by the second half of 2016.
Nubuke's
Enti, who argues that the 'green shoots' of the IMF-assisted economic recovery
have not yet emerged from the trough, predicts that the coming Eurobond's yield
will reflect the terms of Ghana's other debt issues, which are above the rates
of peer countries such as Côte d'Ivoire. Other analysts predict the interest on
the bond could rise above 10%. Copper-dependent Zambia is paying 9.4% on the $1
bn. bond it floated in July.
Enti
adds that Ghana should benefit from the US$1.8 billion cocoa facility being
arranged with a consortium of local and international banks this month to
support Ghana Cocoa Board purchases of cocoa from farmers in the 2015-16
season. The Bank of Ghana has already been able to access some of these
incoming proceeds through a financial swap deal.
For
Terkper and Mahama, the market's response to the bond issue will be a key test
of their recovery plan. Even if the interest rates are no higher than the 8%
charged on last year's bond, debt obligations are now approaching 70% of GDP.
That's higher than a decade ago, when the previous government negotiated an
IMF- and World Bank-backed write-down under the Heavily Indebted Poor Countries
Initiative.
A
couple of random factors could yet help Ghana: international economic jitters
are likely to push up the price of gold, the country's second biggest export;
those same jitters have caused much more economic trouble elsewhere in Africa,
in South America and even in Asia, so Ghana's economic woes are no longer
exceptional. Much will depend on its politics but it could just be one of the
first to emerge from the morass.
Editorial
A
credible Voters Register
There is nothing wrong with the New Patriotic
Party (NPP) making a case for the compilation of a new voters’ register.
That is within the right of all political
parties and citizens of Ghana.
Indeed
such positions taken by individuals and organizations need to be subjected to rigorous
technical test to enable the relevant public institution to come to firm
decisions.
Unfortunately,
it appears that there are some elements in the NPP who are determined to impose
the wishes of the party on the rest of the country.
This
is clearly evidenced in their posture and public utterances.
What
do these elements mean when they publicly proclaim that their position on the
compilation of a new voters register is not negotiable?
And
what can be the purpose of organizing a demonstration on the proposal for the
compilation of a new voters’ register when the matter is under discussion by
all the political parties?
It is important for all political parties and
their associates to realize that they cannot impose their positions on the
people of Ghana.
The way forward as far as the compilation of a
credible voters register is concerned,must lie in dialogue with all interested
parties and people of Ghana.
