Broadening the economy
Despite vociferous disagreements that are played out daily in Ghana’s raucous media, the two parties are more alike than they would have voters believe.
In office, both largely follow a neo-liberal approach that seeks to empower the private sector in recognition of the weakening position of the state and its inability to fully deliver on key services to the people. In practice, the difference between the parties may be in their approach to management and how they communicate their respective agenda to the public.
For both parties, the enduring challenge has been to diversify economic activity in a country that relies too heavily on exports of raw materials – gold, cocoa and now oil. While services now drive a greater percentage of growth, the economy, in particular government revenues are sensitive to fluctuations in the prices of commodities, especially gold and cocoa, in both of which Ghana remains one of the top global producers.
For the present government, those before it and the ones to come, the challenge is to reduce the dependence on these exports and broaden the offerings that Ghana presents to the world in order to guarantee economic stability and boost job creation. Aside from this, the country is faced with the challenge of a public sector that is bloated, obstructive and often ill equipped to serve and, for these and other reasons, too expensive for the state.
In the wake of the introduction of a ‘ Single Spine Salary Structure’, meant to rationalise and unify the pay structure across the public sector, the wage bill has ballooned and now poses an existential threat to the economy.
Government is naturally concerned and is keen to try out some measures including a pay freeze, to which the Trade Union Congress has already signalled its opposition. How government manages this challenge will be key to the economy and its very survival, going forward.The country will also need to address the problem of the inadequacy of the infrastructure, which hobbles its growth. Power difficulties, for instance, are a staple of complaints from businesses and individuals. Poor access to water has been known to lose investment opportunities. Much of inland transport, including heavy goods to and from the country’s ports is by roads, which are themselves in need of expansion. The government’s 2014 budget addresses this challenge and proposes an infrastructure fund to deal with the deficit in collaboration with the private sector.
Overall, Ghana remains a remarkably stable country facing some economic challenges that also present opportunity for investment. What is uncertain is the ability of the political class to fashion comprehensive solutions that will address those challenges and free up the undoubted potential of the economy for tremendous growth.