In Ghana workers marching through the capital and other
cities were showing their dismay at recent price hikes and taxes, which have
increased the cost of electricity by 59%, water by 67% and fuel by 28%. At the
end of last year, inflation in Ghana was running at 17.7%. “We are drumming home our concerns
generally,” says Kofi Asamoah, secretary general of the Trade Union Congress,
“to let the public and government know how serious we are.”
Ebenezer Pabi, a warehouse keeper at an import company for
17 years, says prices are making life in the West African country very
difficult. “The government is raising
things and the living standard in Ghana is hard. Money is not flowing in the
system and it is a problem. It is difficult. When my child got sick and we went
to the hospital, the bill was high and even the school fees have increased – it
is too much. We want the government to see how we, as workers, are suffering.”
the 39-year-old father of two explains.
Once an African success story built on gold, oil and cocoa,
Ghana leveraged its natural resources to produce strong economic growth in the
early years of this century. It met the millennium development goal of halving
poverty rates by 2015, and was hailed as a model of political stability after
peaceful elections. But plummeting global commodity prices have pummelled
Ghana’s economy. Export revenues for oil, gold and cocoa declined from $8.2bn
(£5.8bn) between January and September 2014 to $5.8bn a year later. Add to this
a three-year electricity crisis, rising public spending and debts of 90bn cedis
(£16bn) – giving Ghana a debt-to-gross domestic product ratio of more than 70%
– and it is clear why one of Africa’s most stable countries is in trouble. The
mounting debt levels led the International Monetary Fund to introduce a $918m
three-year assistance programme in April. A third payment of $114.6m was given
this month and the IMF said Ghana must rein in spending to reduce debt. The
cedi lost 18.75% in value against the dollar in 2015 and its decline, along
with the introduction of a capital gains tax on all listed securities on the
Ghana stock exchange, has seen foreign investor interest wane.
Geoffrey Maison, analyst at investment bank Cal Brokers in
Accra pointed out “A lot of foreign investors pulled out of the stock market
and a lot of people are now moving toward government of Ghana securities and
away from the stock market. With revenues going down, we expect the government
will come back to the market to borrow. If they are borrowing like they
borrowed last year, we can expect interest rate levels to go up and inflation
will be affected.”
The public’s anger at higher prices has been stoked by a
perception that the government is mishandling the economic downturn, and
mismanaging public finances. A 2015 Transparency International study on
perceptions of perceptions of corruption in Africa ranked Ghana second worst,
behind South Africa. In October seven high court judges were suspended amid
bribery allegations. The transport minister was forced to resign in December
after it emerged the government spent 3.6m cedis painting pictures of President
John Mahama and former leaders on buses. Mahama’s government, which will go
head-to-head with the National Patriotic party in November, has been criticised
for lavishly rewarding government officials with houses, cars and fuel in
addition to generous salaries.
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