Unsurprisingly, the presentation made on Wednesday by Vice President Dr Mahamudu Bawumia on behalf of the economic management team was as much political statement as a scientific assessment of Ghana’s economic performance under the President Nana Akufo-Addo administration. Little wonder then that it has attracted an immediate fierce response by the political opposition.
As a newspaper that takes immense pride in its political neutrality, Goldstreet Business would normally avoid making its verdict public with regards to the ongoing claims and counter-claims between the two major political parties as to who has achieved a better economic management performance. Unfortunately, the average Ghanaian voter is driven by impassioned sentiment towards or against each major party so passing a verdict on their claims opens us to scathing, but unenlightened criticism by the core supporters of one party or the other.
However, because of the crucial nature of the latest debate about comparative economic management performance we have decided to take the risk.
Most importantly our overall verdict is that indeed, the macro-economic fundamentals currently are better than those at the time the incumbent administration assumed power at the start of 2017. The verdicts of Standard & Poors and the international investment community which oversubscribed the latest Ghanaian Eurobond issuance some six times over, support this.
However, the superiority of the incumbent government in this regard is nowhere near as huge as the Vice President claims it is. It is instructive that he deliberately used rebased economy ratios to assess his administration and old series ratios to assess his predecessors. This in itself confirms that the motivations behind his presentation were primarily political rather than economic. It also exposes him to criticism of his presentation even where they were factually accurate.
On the other hand, we hold the position that criticism that the macro-economic achievements claimed by the incumbents are untrue simply because they have not translated into better micro-economic conditions at the individual household level are unfair. The fact is that the two do not necessarily go in sync. Indeed, the fact that ex-President Mahama’s achievements with regards to infrastructure – which the incumbent government has not even nearly matched so far – were accompanied by a deep fall into macro-economic instability with dire repercussions at the micro level as well, should be clear evidence of this.
However, we hold the view that the improving macro-economic fundamentals, if sustained will sooner or later reflect in better economies at the household level. Indeed, the incumbent government appears to be largely putting its political fate at next year’s general elections on this, although supported by a strong dose of populist – and in some cases, economically imprudent – initiatives and policies.
Ultimately though this is the most important point of all; general elections are still nearly two years away and all the political noise now being made by both parties with regards to each one’s comparative economic performance are rather premature. Voters will make their decisions based on their fortune as at December 2020, not April 2019.
We therefore suggest both parties concentrate their respective energies on winning over the electorate by that time, inclusive of macro-economic statistics that support their claims at that time. The current debate, begun on Wednesday, is little more than a storm in a tea cup.