Where’s Ghana gone?
By Bright Simons and Jamie Drummond
Three years ago, we wrote a piece together about Ghana’s planned end to “development aid” a decade later, by 2023. Our aim was to encourage the world to watch Ghana closely to see how she fared on the journey toward the end of aid and to see what the lessons might be for other developing countries. A third of the way along this journey, we are writing again together to check in on progress in a number of areas, or the lack of it. There are many lessons. But not all of them are those we or so many others hoped for.
Back in those heady days, Ghana was — and in some quarters is still — considered an African shining light. The country has for most of two decades now ridden a great narrative of African leadership, one that is driving towards solid middle-income status by the mid-2020s, having by then hopefully eradicated poverty, hunger, insecurity and the afflictions of an earlier age. Ghana has given hope to many of becoming the example both of how developing country nationals can drive this development, and also about how smart international partnerships can help — through debt cancellation; global trade; investment; and transparency initiatives designed to complement a nation’s own efforts towards building greater self-sufficiency and capacity to contribute to the international system.
So why are some of these hopes being dashed today? How can the narrative be reclaimed? What are the lessons for the world, especially the developing world? To understand this, we need to do something pretty basic: Follow the money over the last 15 or so years.
As a beacon of multiparty democracy the country was touted as a model, a donor darling
One account of what has gone most astray requires that we go back to the start of the millennium, and what was going right. In 2000, Ghana received HIPC (Heavily Indebted Poor Country) debt relief, and a boost in international development aid that was reinforced in 2005 with further debt relief and even more aid, thanks to the global “Drop the Debt” and “Make Poverty History” campaigns. The country also received various benefits from the likes of the African Growth and Opportunity Act, and the Millennium Challenge Account; and from boosts in funding for healthcare from global initiatives like the Global Fund for AIDS, TB, and Malaria and GAVI (Global Alliance for Vaccines and Immunisation). As a beacon of multiparty democracy the country was touted as a model, a donor darling who, delightfully, also wanted to plot a path towards the end of aid. By 2010, the country had great successes to show for its investments in agriculture and reductions in hunger and poverty and big boosts in terms of declining under-five child mortality.
On top of the international partnership, Ghana’s own political leadership seemed unrelenting in their devotion to the democratic process. Laws criminalising free speech were dropped, and wide consultations with civil society ahead of major government decisions became the norm. Within a few years, the country boasted of one of the freest and most vibrant media environments in the world. In 2015, only Namibia scored higher than Ghana among the 54 African countries on the revered Reporters Without Borders’ index. More to the point, Ghana beat Australia, France, the United Kingdom, and Spain; and completely left the US and Japan way behind.
But this glamorous celebration of liberty masked some troubling undercurrents: Popular freedoms were being underwritten, not by a robust culture of accountability and the growth of critical institutions, but mostly by a political system that has outgrown the rudimentary checks and balances, and a media that lacks the tools to really engage its audience on matters of governance.
When oil was discovered in 2007, the shaky superstructure of democratic accountability abruptly started to come unstuck. The incumbent government in 2008, the NPP, started borrowing in anticipation of future revenues, and to encourage an NPP victory at the polls of that year. But they lost a close election. The government’s prompt handing over to the next administration only went further however to enrich the country’s democratic credentials, but it is very noteworthy that, though eligible and despite some significant achievements while in office, former President Kufuor did not win the Ibrahim prize for governance after standing down. The Ibrahim Award is based in large part on its formidable index, which takes into account more than popular democracy or episodic economic growth.
Still, Ghana had nearly quadrupled its GDP, partly as a result of a commodity super-cycle boom, partly as a result of improved macroeconomic techniques that granted more free rein to a previously stunted financial system, partly because of an emphasis on agriculture, and partly because of higher business confidence that expanded inbound FDI, the latter resulting in a fourfold growth in inflows in the first decade of the 21st century. No wonder Obama graced Ghana with his presence on his first trip to Africa as president in 2009 — snubbing Kenya, his father’s homeland in preference for Ghana — Africa’s good governance star. Ghanaian leaders have become used to hogging the limelight to tout these achievements. And a world that had been dazed by the Ghanaian national soccer team — the Black Stars’ — mesmerising performance in Germany at the 2006 World Cup fiesta had a lot of time for President Atta Mills when he took over in 2008. He promptly acceded to a slew of international protocols on transparency in the extractives sector, and pledged his full commitment to making the Ghanaian oil sector a rare beacon of ethical governance and transparency in the developing world.
Some of the fissures in Ghana’s foundation for becoming a modern state had by this time become dangerous cracks.
Yet, President Mills, despite his commendable legacy of setting safeguards around how oil funds are to be spent by way of setting up special, transparent, funds, and launching a unified salary scheme across the public sector to reduce incoherence, can still be accused, fairly, of having done little to reform the state institutions. He made all the right speeches but neglected to introduce even a single seminal shift in the structures of the rule of law, or deepen the capital markets, or repair the creaky energy infrastructure. When he passed away before the end of his term, and his Vice President succeeded to the top job — going on to win a full term of his own in 2012 — some of the fissures in Ghana’s foundation for becoming a modern state had by this time become dangerous cracks. Nearly a billion dollars have over the period been misapplied, according to various assessments by anti-graft commissions appointed by the government and by the country’s independent Auditor General. Much of this money got squandered when, in a fit of confidence, Ghana decided to build a welfare system from scratch, doling out jobs to unemployed youth, social safety nets for the poorest, and tree covers to its desert-creeping Northern hinterlands. All these are arguably the right aims — if the funding and sound mechanisms to administer them are secure. But they were not secure.
Ghana’s style of respecting the façade of democratic fashion is reflected in the existence of an Auditor General that has all the powers to have stopped this egregious wastage, yet they preferred instead to sermonise in Parliament and pontificate in the Press. This reminds one of Lant Pritchetts theory of “isomorphic mimicry:” copying the appearance of having institutions but not adopting and adapting the actual practice of institutional accountability. In simple terms, the Auditor General’s office lacks both the culture and apparatus to stop the abuse of public funds, in part because its leadership and funding depend on the executive branch. Unfortunately, the government’s current constitutional reform process does not address these deficiencies.
The result is impunity when companies with strong ties to certain government officials win contracts for which they were manifestly unqualified and ill-equipped to execute. One such company collected millions of dollars to rear poultry in an arid region of the country that does indeed need help but to date, no one can account for the birds. Yet there have been very few prosecutions, and by the government’s own admission less than 5 percent of the reported missing and misapplied money has been recovered.
One of the biggest obstacles is a constitution that concentrates power in the executive branch, leaving the legislative and judicial branches relatively weak and with a low capacity to serve as a check on the executive.
The impact of the general weak capacity of the state apparatus to spend the country’s scarce resources judiciously can be felt in the debt numbers, which at the peak of the global debt cancellation effort in 2005 dropped to $2 billion from $7 billion, and has now crept back up to nearly $25 billion. Despite its significant GDP growth over the same period, Ghana’s out of hand current account deficits are now compounded by high interest rates payments it can ill afford.
Ghana is today back under the tutelage of the IMF, after exiting most of its programs in 2006, when the national confidence level was in the stratosphere. Despite earning the usual accolades from the IMF about its progress under tutelage, a debilitating power crisis that has seen the country lose nearly a third of its power output for most of the last three years shows quite clearly that the country’s primary challenge is how to orchestrate its disjointed parts into a harmonious response to the challenge of development. Ghana’s energy consumption rises by ten percent per year. To keep up would mean a new power plant every year, yet the country’s arthritic institutions take 5 years to shepherd greenfield projects into a state where they can attract investment. What is worse, when the state marshals the will to address the problem it proves incapable of blending effective execution with sound governance, as has become evident in the ongoing Ameri scandal, in which the cost of an emergency backup power plant has been shown by Norwegian investigators to have been inflated to more than double what comparable projects in Algeria and elsewhere have cost. Follow the money.
There are some bright spots, however. The progress made between 2000 and 2010 in respect of health and hunger gains has not been entirely eroded yet. And specific policies like the oil for agriculture swap, where 10 percent of revenues from oil were to be programmed into agriculture seem to have been relatively effective, and there is little doubt that some infrastructure projects are bearing fruit, such as the US-funded George Bush highway, which observers admit has reduced some of the traffic in central Accra and helped the horticultural trade to hold up in spite of the recent general decline in the agricultural sector (zero growth this year) and in manufacturing.
But if Ghana is to genuinely renew its sparkling narrative, it must back the brand with substance or risk slipping from lower mid-income status back to Low income status.
Some critical interrelated areas that need urgent working on are:
1. Prioritize Curbing Corruption
The Auditor General’s reports over the last few years show a country where administrative impunity has simply run amok. Nearly half of legislators are reported to be failing to show up in Parliament for the minimum number of times required to hold on to their seats, and this is reflected in the poor scrutiny of government’s spending plans. Can the President show a genuine will to lead in re-establishing the intent of the country’s constitution of a system of checks and balances that genuinely work? Corruption is likely to become the central issue of the next election. It deserves a similar level of concern from the international community as it considers investing in and doing business with Ghana. In its search for an African flagship success story, the global do-gooders must no longer be content with just feting and hailing Ghana’s leadership at global gatherings; they must also insist on real substance.
2. Make campaign finance, government budgets and contracts fully transparent
If we could follow the money, from who funds campaigns to who wins contracts once campaigns are won, it will offer interesting results. Allegations that Nigerian oil money corrupted Ghana’s democracy might be further examined. Laws could be passed to prohibit election related splurges. To some extent, the IMF bailout may enforce this for the next election, but that cannot be left to chance. All electoral campaign contributors and related interests must be made public and banned from winning contracts other than through multi-source open competitive tenders. Oil blocs must be auctioned in a highly transparent and widely advertised way. Data on public sector contracts, budgets, and services must be made open. And the international community must advocate for public registers of the ownership of anonymous shell companies, to hinder money laundering.
3. Reform public sector and public financial management
Whilst successive governments have paid lip service to the task of reforming the public sector to ensure greater accountability, better spending decisions, an improved investment climate, and the elimination of “ghost workers” that bloat the public payroll, the process has become bogged down in reform anaemia caused by those who stand to lose their underhand benefits. Local activists and international debt relief campaigners must team up to tighten the appropriations process in Ghana, which is worse than in neighboring Nigeria. For instance, frontline agencies, through whom much of the money is spent, are not required to directly defend their spending projections and account for their spending decisions before legislative oversight bodies. Early-stage, punitive, appropriations reforms must however prioritize reforming those areas that the elite care about, such as urban works projects, and not the few welfare programs that benefit the poor.
4. Enforce rule of law, demand better leadership
The Mahama administration has thrown its weight behind an investigative journalism project that has discovered systemic corruption within the Ghanaian judiciary. Meanwhile the country’s main Ombudsman (or “CHRAJ”), a role which is institutionally tasked with this job, and whose mandate covers all arms of government, remains in the doldrums, and is now without a head, following poor appointment decisions, and perennial underfunding by political bosses. The Administration must be held to the high standard of empowering the Ombudsman with both the independent prosecution powers and means, as well as the resources, to hold high government officials accountable in a meaningful, substantive, way.
5. Global Partners — civil society, donors, private sector — must be more responsible
All the millions around the world who marched for Jubilee 2000 Drop the Debt, then for Make Poverty History and ONE, and whose combined voice led to countries like Ghana getting debt relief and more aid, preferential trade, and the benefits of new global transparency frameworks, must all now march for laws and actions that stamp out corruption, poor accountability, and practices that weaken institutions. Vastly influential global foundations and organisations like the UN or the Bill and Melinda Gates Foundation can do more to confront the importance of fighting corruption. Ghana’s experience shows clearly that weak accountability directly undermines any laudable aims in healthcare, nutrition or other newly agreed Global Goals for Sustainable Development. The global community has one important opportunity to organize in May 2016 when London hosts a historic anti-corruption summit. This summit must stab at the heart of the international corrupt regime of shady bankers and deal brokers that now threaten countries like Ghana.
Ghana is a great and ancient nation. Ghana will still eradicate extreme poverty and hunger and achieve all the Global Goals at a national level, and along with that end any need for aid. There are elements of a truly powerful civil society, a vibrant talk radio scene, active grassroots groups like SEND Ghana, the dynamic network of Accra based tech hubs and start-ups, Oxfam Ghana, ISODEC and think tanks like IMANI and ACET all demonstrating vital intellectual and moral leadership. At this pace though, 2023 is probably overoptimistic as a deadline by which to end extreme poverty and any need for overseas aid — unless something more dramatic happens to force the political elite to sit up, pay attention, and take urgent action. The key insight is this: Whilst the razzmatazz of popular democracy and feverish electioneering is all well and good, and the 2016 elections promises much of this, a healthy democratic society needs far more for a foundation. It needs the supporting core of “institutional fiber,” something that enables the digestion into the body politic of all those ideals its leaders pledge to. Ghana needs the leadership guts necessary to develop real “checks and balances” on its own political leadership. As the country settles into its third year of the third decade of its modern democracy, it is time for all her citizens at home and friends abroad to shake off recent setbacks and take the next step forward.
Bright Simons is the inventor of the world’s most widely adopted SMS anti-counterfeiting system (www.mpedigree.net) and a public interest researcher at Ghanaian think tank, IMANI.
Jamie Drummond is co-founder and Executive Director of The ONE Campaign (www.one.org).
