On Saturday 7th January, 2016, Ghana inaugurated Nana Akufo- Addo as its new President. Our guest contributor, Roland B- Johnson, provides us with an analysis of why John Mahama (the immediate past President) lost the election. He also examines the opportunities and challenges facing the new President.
“It’s the economy, stupid”. This was the phrase coined by Democratic campaign strategist for Bill Clinton, James Carville, in the 1992 US general election. His point? The principal electoral issue of an election had to be the economy. Ghana’s now victorious opposition party in the 2016 election had their own version of this phrase for voters; “hw3 w’asetena mu na to aba”. To wit; “examine your standard of living and vote”.
The incumbent president lost. He lost badly. The margin of over one million votes is one of the largest in Ghana’s electoral history. His party, the NDC, suffered more damage with the high turnover in parliamentary seats including ones that hitherto were considered very safe. Post-election analyses have centered not only on why the president lost (indeed several polls indicated he would lose) but on why he performed so badly. Quite a lot of people have been interviewed by the media whilst others have turned to social media with their own reasons. It really was the economy after all.
John Mahama did campaign on the economy. He sought to convince Ghanaians to take a progressive view on the economy. In his view, his government had made tremendous infrastructural investments in the country across all the sectors and although the direct returns could not be felt immediately, he had positioned the country to embark on a sustainable growth path. He had a point. Huge investments were made in the areas of health, education, sports and many others. He consistently blamed external factors for the economic difficulties he faced – sharp decline in prices of major exports, suspension of donor support by the EU and others.
Ghana’s economy has been experiencing a slowdown from the highs of 2011 when growth was 14% following the commencement of oil production. Growth in 2016 is estimated to be just about 4%, bolstered by increased oil production. Cost of living and doing business have sharply risen with inflation reaching 17.7 % in 2015 and interest rates hovering around 26%. With dwindling revenues from exports and increasing pressure on the budget by interest payments on loans, the John Mahama administration had been accused of taxing “just about everything” including at one point, a tax on condoms (later reversed). The sharp fall in global oil prices did not significantly reflect in the prices at the pumps as several taxes imposed on fuel still ensured that Ghanaians paid high prices for fuel.According to ISSER, the energy crisis, popularly called “Dumsor” that saddled the government during most of its tenure is estimated to have cost the country between 2 – 6% of GDP.
The NPP’s approach to saving the economy as evidenced in their manifesto is to pursue a pro-business agenda, true to their ideological tradition. This, they claim, will be manifested in the reversal or reduction of several business-related and other “nuisance” taxes. Nana Akufo-Addo has consistently said that his government has no intention to compete with the private sector; a statement loosely interpreted to mean that the government will curb the domestic borrowing binge she has been on in recent times. The new government also has an ambitious plan promise to assist the private sector establish at least a factory in each district. They have given indication that they intend to boost the ailing agricultural sector. One way they plan to do that is to establish irrigation dams in every village in the three northern regions to boost farming activities.
Although the NPP say they are pro-market in their ideology, some of the largest social welfare programmes were initiated by them in the past – National Health Insurance Scheme, Capitation Grant (free education in public schools at the basic level) free healthcare for pregnant women among others. The party has not only promised to strengthen these schemes (some have taken different forms) but also to extend or establish new ones. This includes free education to the senior high school level, a development fund for Zongo communities etc.
Governance was another major issue in this election. The John Mahama administration was beset with a litany of political (corruption) scandals which many perceived were not adequately dealt with. Several accusations of bloated costs have been made over contracts that were not subjected to the competitive bidding process.
His strategy to bring on board young people – some with little or no prior experience in high level management positions – to fill key positions were seen by some as an expression of faith in the youth. However, others treated it as an indication of a government struggling to attract very experienced people or the use of such appointments to reward loyal party members. These young individuals became easy targets for blame when the economy began to falter. The best example his critics use to illustrate his tendency to choose party over country was his decision to remit the prison terms of three party loyalists who had been jailed for contempt by the country’s supreme court for unsavoury comments directed at some judges
It’s difficult to say if corruption was worse under this NDC administration or if they were victims of the power of social media in exposing and quickly spreading news. Whichever way one looks at it, this new government will know that there’s only too much you can try to hide from the people. The advent of social media tools means that several things which hitherto could be hidden from the public are easily exposed and spread like wildfire. The president’s resolve to therefore crack the whip will be severely tested severally.
The new president comes into office on the back of some good news. Several macroeconomic indicators suggest that the economy has stabilized – inflation rate is falling, the deficit is falling, interest rates could see a fall following the continuous drop in treasury bill rates and the cedi has largely remained steady. The exiting finance minister also boasts that a “sinking” fund set up by the government has enough resources available to meet current debt obligations.
Akuffo-Addo’s inherits quite a number of challenges however. Among them will be Ghana’s debt liabilities. Ghana’s debt to GDP is estimated to hit 66% in 2016. High interest payments have been a major drag on the national budget and some analysts say this burden has limited the scope for the government to meet her commitments including some statutory payments. Furthermore, the country is not fully out of the woods with regards to the energy situation despite the respite Ghanaians enjoyed in 2016 and promises by the outgoing government that they have effectively solved the problem. The sector requires the devotion of lots of resources to secure crude oil to generate power. So the question remains; “where are they going to find the money?”.
The biggest challenge will however be the expectations Ghanaians have. This overwhelming endorsement at the polls may just be the greatest obstacle he faces. Nana Addo has been branded a saviour by some. There were joyous celebrations in churches when he won and some of his supporters even suggested that it felt like Ghana just had her second independence. It doesn’t also help (in managing expectations) that he keeps (re)assuring Ghanaians that they are about to experience a dramatic change in their fortunes. The pressure is definitely on and we can trust the opposition to remind him and Ghanaians of his promises every step of the way.
The talk is over. He has to deliver now.
Roland B-Johnson is a research student supported by the School of Oriental and African Studies (SOAS).