Pace-setter in search of new levels of growth

By David White
Published: October 31 2005 16:45 | Last updated: October 31 2005 16:45

The headline in the Daily Graphic, one of Ghana’s best reputed newspapers,
was revealing. “Peace at last”, it proclaimed across the front page. Which
one of stable Ghana’s more turbulent neighbours could this refer to? But no,
it was a domestic story about a protracted chieftaincy dispute in the
country’s Eastern Region. The case, an attempted breakaway from the
traditional local hierarchy, had gone through the highest courts in the
land. As part of the settlement, the offending chief was to provide for a
consignment of schnapps, the slaughter of 12 sheep and the burial of a
previous office-holder who, by then, had been dead for five years.

Two points arise from this story. One is that conflicts in Ghana, when they
happen, tend to be of a different order from those that afflict other parts
of Africa. The other is that traditional patrimonial structures retain a
particular importance alongside the trappings of a modern democratic state.
Ghana’s establishment straddles both systems with disconcerting ease. You
can find, say, a high-powered financial services consultant who doubles as a
paramount chief, with all the deference, paraphernalia and land owning
rights that go with the title. Some argue that the compromise between old
and new is a factor of social cohesion that has helped recent governments
push through unpopular measures. Others, including leading donor
representatives and foreign investors, see it in some ways as a brake on the
pace of change.

Ghana stands out from most of its region as a country that has come back
from disaster. In the early 1980s, the nation that had led the wave of
independence among the colonies of black Africa was in a state of economic
collapse. Since then, it has emerged as a pace-setter for recovery and
standards of governance. It passed a milestone five years ago when Jerry
John Rawlings, former flight lieutenant, revolutionary leader and then
reformist president, stood down after 18 years in office and his party was
voted out. The election that brought John Kufuor to power was the first
change of government by the ballot-box in Ghana’s history, and one of the
first in Africa, too.


  >
>>
>Country fact file
>>
>>
>
Click here for a PDF file

>
Returned for a second and final term last December, Mr Kufuor has been a
reassuring presence, strengthening Ghana’s image as a haven in a volatile
neighbourhood. As a society, Ghana has suffered much less damage than
others, either from its experience of colonialism or from subsequent strife.
It has had its share of coups d’état but now enjoys a settled political
system, with genuine competition between parties of left and right and
respect for the rule of law. Generally peaceful within its borders, it has
been a promoter of peace outside. A disproportionate number of Ghanaians can
be found in senior international posts, starting with Kofi Annan, UN
secretary-general, and Mohammed Ibn Chambas, executive secretary of the West
African regional organisation, Ecowas.
For two decades, it has been a testing ground for economic reforms. One of
the first African countries to be put through the rigours of “structural
adjustment”, it is now one of the first to benefit from combined donor
support channelled directly into its government budget. With Rwanda, it was
one of the first countries to submit itself to peer review by the African
Union in April this year.

With its easygoing atmosphere, Ghana is beloved of aid workers and a
favoured destination for assistance from the UK and elsewhere. Already a
beneficiary of debt relief, it is in line for further debt write-offs and
increased support under the plans outlined for Africa by the G8 leaders at
the their Gleneagles summit in July. Donors, almost as much as the
government, are anxious to portray it as a star performer. Certainly, its
recent period of stability is unprecedented since independence and
exceptional in tropical Africa. Even the currency, the cedi – which
middle-aged Ghanaians can remember being worth $1, compared to the
present-day value of barely one hundredth of a US cent – is steady these
days.

But Ghana’s performance is also a source of frustration, falling short of
its promise. Real economic growth has stayed within the same range of
between 3 and 6 per cent a year since the mid-1980s. During that time, the
population has risen from 12m to 20m, and continues to increase by more than
500,000 a year. With many Ghanaians seeing little or no visible improvement
in living standards, Mr Kufuor’s government is searching for ways of
attaining a higher growth plateau.

The apparent growth barrier is subject to different interpretations. Is it
because the free-market reforms that have been prescribed are the wrong
medicine? Or is it that the dose has not been large enough? In some
respects, Ghana still looks like a classic post-colonial African economy,
depending on a few commodities and, more recently, expatriates’ remittances.
Cocoa, gold and timber continue to account for three quarters of exports.

The “golden age for business” that Mr Kufuor once proclaimed has failed to
materialise as rapidly as many hoped. Foreign investment is small, deterred
by high business costs and problems such as land tenure. Since most land is
vested in local chiefs, transactions are often messy and uncertain.
Facilities such as power, water, ports and roads badly need upgrading.
Embarrassingly, the triumph of Ghana’s national soccer team last month in
qualifying, for the first time, for the final stages of next year’s World
Cup in Germany was marred by a nationwide blackout.

Development partners complain of slow decision-making by government on big
projects, and a reluctance to cut back the country’s bloated civil service.
As the Financial Times discovered while preparing this report, Ghanaian
bureaucracy can, when it chooses, be as officious and obstructive as any on
the continent. Legislation on government procurement and financial
management has reduced the scope for abuses. But many say that, despite Mr
Kufuor’s anti-corruption platform, low-level graft has continued and
possibly increased. Mr Kufuor’s opponents accuse him of nepotism and ethnic
favouritism.

The impact of stronger recent growth is mixed, and in some areas barely
discernable. Figures for extreme poverty show Ghana on course to meeting the
target set under the UN’s Millennium Development Goals – halving the 1990
rate by 2015.

But some indicators for health and nutrition have been getting worse, with
an increase in infant deaths between 1998 and 2003. The government is in the
process of pioneering a mandatory national health insurance scheme funded
from contributions and earmarked value-added taxes, which will make
treatment available without payment. But UN officials say that on present
trends Ghana will miss its MDG health targets. The country has been losing
more than half its doctors to the brain drain.

Money is flowing back from members of Ghana’s diaspora, reckoned to number
3m. But, amid signs of conspicious middle-class spending, the perception
among many ordinary people is that they are no better off. Discontent among
young urban dwellers now looms as potentially Ghana’s biggest political
risk. Some of those who originally voted for Mr Kufuor are bitterly
disillusioned. Last December’s election was not the walkover many expected.
Whoever his successor as candidate is in 2008 it would not take much for an
upset. In common with a number of others in Africa, Ghana’s government is
struggling with  popular expectations it created when it was elected to
power and has so far been unable to meet.

¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤
To unsubscribe/subscribe or view archives of postings, go to the Gambia-L Web interface
at: http://maelstrom.stjohns.edu/archives/gambia-l.html

To Search in the Gambia-L archives, go to: http://maelstrom.stjohns.edu/CGI/wa.exe?S1=gambia-l
To contact the List Management, please send an e-mail to:
[log in to unmask]
¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤