To sit down and keep quiet and still think that narcissistic politicians will ever do you "any sustainable good" is akin to the man who tries to pull himself out of a swamp by his own hair – hopeless
I have read President Mahama wailing that “it is in challenging times that one needs their friends. Unfortunately, our development partners have not been as responsive to our home-grown fiscal stabilization policy as I would have hoped.” His Excellency was crying about the declined volume of financial support from our donors in support of our development.
The President’s cry clearly makes a case that the hardships we are facing now can be linked to this development in a significant measure – as if foreign aid has ever caused development or reduced any people’s hardships anywhere before, the reduction of which in Ghana today causing unprecedented hardships.
In this rather long piece, I deconstruct Ghana today, the role of foreign aid or development assistance in our development trajectory and suggest that the way forward to reverse the nose dive situation we have in Ghana is more Occupy Flag Staff House, Red Friday, TUC Demonstrations and other similar protests.
Africa and development assistance
The idea of foreign aid is rooted in a more than five decades old argument that poor countries are unable to make savings and that with foreign aid, we can save and invest and subsequently bail ourselves from poverty.
Walt Rostow, in his famous Stages of Growth had declared that “an increase of $4 billion in external aid would be required to lift all of Asia, the Middle East, Africa, and Latin America into regular growth, at an increase of per capita income of say, 1.5% per annum” (Rostow 1960 cited in Easterly, 2002:9; Easterly, 2006:25).
So for the past five decades Easterly (2006) estimates that more than 2.3 trillion dollars have been transferred from rich countries to poor countries. Out of this 2.3 trillion dollars, according to Moyo (2009), more than 1 trillion was transferred to Africa.
What economic growth and poverty reduction did this colossal investments bring? ZERO! Indeed, in the case of Africa poverty has rather increased and Sub-Saharan Africa, per the 2007 United Nations Human Development Report will account for almost one third of world poverty in 2015, up from one fifth in 1990 (Moyo, 2009:5).
While the number of the world's population and proportion of the world's people in extreme poverty fell after I980, the proportion of people in sub-Saharan Africa living in abject poverty increased to almost 50 per cent.
All these deteriorating poverty situation and statistics in Africa are against the backdrop of a colossal 1 trillion dollars spent on development aid in the last five decades.
Easterly compares that “if all foreign aid given since 1950 had been invested in US Treasury Bills, the cumulative assets of poor countries by 2001 would have amounted to $2.3 trillion” dollars (Easterly, 2002: 6 – 7) yet, the goal of achieving increased living standards and reduced poverty in the typical poor country through development assistance has not been attained.
Whereas some poor countries have been able to achieve significant economic growth and poverty reduction and have now become influential economies in the world (Korea, China, India, South Africa, Botswana, Taiwan and Singapore), studies show that their development has nothing or at least less to do with foreign aid. Indeed they began experiencing growth upon weaning themselves of aid (Fox, 2000; Easterly, 2002; Easterly, 2006; Moyo, 2009).
Aid flows to Ghana in the last five years
According to the World Bank in 2008 Ghana received 1,306,930,000 (1.3) billion dollars in aid. In 2009 we received 1,581,820,000 (1.5) billion dollars, in 2010 it was 1,692,540,000 (1.6) billion dollars.
The figures for 2011 and 2012 are 1,810,220,000 and 1,807,910,000 billion dollars respectively. Now let’s answer this question: Does the health of Ghana today look like a country where all these monies have been invested in in the last five years?
Should we not be out of our poverty miasma by now after receiving these huge sums of dollars? Where in Ghana can we find traces of these colossal sums of dollars?
In Africa development assistance is voted into Corruption
The threshold question therefore is how come the trillions of dollars pumped from rich countries to Africa and Ghana have failed to generate economic growth and poverty reduction? Several reasons have been adduced to explain this but the most prominent of all is “CORRUPTION” (See Calderisi, 2006; Moyo, 2009; Shleifer, 2009).
It is estimated that for every aid that comes to Africa, only 5-10% of the aid directly goes to the intended beneficiaries. The rest is subject to capture by corrupt politicians and bureaucrats. This explains why close to two thirds of Ghanaians are still poor, we do not have water, good roads, electricity etc despite the huge financial support received from our generous development partners. The monies get locked up in the pockets of politicians.
Clearly, foreign aid has always been additional rents for politicians hence its coming in abundance or shortage (as President Mahama claims) poses no risk on development save the situation explained below:
President Mahama’s cry in perspective
It is commonly argued that we are in hardships today partly because unlike previously, Ghana does not attract a lot of development assistance upon our becoming a Middle Income Country. This argument is not necessarily accurate! Being a middle income country does not cut a country’s foreign aid supply. It only means that official development assistance flows, particularly in their most concessional form, generally are replaced by loans from public and private operators which are not concessional, or only to a minimal extent.
When foreign aid are in abundant supply, as explained earlier it is never used for development, it serves as extra and cheap rents for politicians. They are therefore able to use the revenues from taxes and natural resources generated internally to cater for local institutions, public and civil servants, finance few public goods to stabilize the political system so that (until the next elections), they can have their peace of mind and comfortably chop the aids. It therefore means that in the absence of abundant supply of foreign aid, politicians must either reduce their rate of rent seeking (corruption) or chop the resources locally generated and put the political system in abeyance and I think the latter is what has happened to Ghana today!
Knowing that funds from our development partners will not come like it used to, the only thing that needed to be done to save the situation was to reduce the level of corruption and rent seeking. But unfortunately, corruption and rent seeking rather increased in an unprecedented scale. No wonder Africawatch honoured Ghana the “Republic of Corruption” title recently. Evidence of this include the several create, loot and share scandals known to us all – GYEEDA, SUBAH, WOYOME, ISOFOTON, GRA and the other gargantuan corruption scandals and dubious judgment debts payments! The effect is what we are witnessing now – they have chewed the meat to the bones, nothing is left to foot even statutory bills, NHIS, School Feeding, Wages and Salaries, GET FUND etc.
To be able to match the current elevated taste/hunger for corruption, government will always have a need to generate more revenues and since funds from donors are not forthcoming the only available option was to introduce new taxes and increase existing ones and this explains the introduction of some new weird taxes and the increment of the thresholds of existing ones, removal of subsidies etc. The claim that the wage bill has weighed down the economy is therefore bull. Why has government refused to disclose the full wage figures when it was challenged to do so by the Trade Unions Congress?
More Corruption, More Hardships in Ghana if……
It seems to me that this trend will not reverse itself easily. National Petroleum Authority is hiring an office with 63 thousand dollars a month.
When the Energy Ministry set up a committee to look into it, President Mahama's Chief of Staff wrote to quash it. Despite all the murkiness that surrounded our trip to Brazil, President Mahama has turned the 'Committee' to look into the issues into a 'Commission'.
This means that nobody can be taken to court or made to account for anything even when adverse findings are made against them by the Commission (See Justice Marful-Sau judgment on Wereko Brobbey (Tarzan) & Kwadwo Mpiani vs the Republic of Ghana).
I have listened to His Excellency, President Mahama arguing albeit rightly that we are in a democracy and he cannot forcibly bundle people perceived or alleged to be corrupt into the prisons.
This line of argument erroneously construes an impression that democracy makes fighting corruption in Ghana difficult and strenuous.
How many long years did it take Mr. Martin Amidu (Must God forever bless him) to win the cases against Waterville and Isofoton?
He is only a private person with few resources yet since he was committed to the cause, he mounted the prosecutions and it did not take long for him to reverse all those dubious judgment debts. Government therefore has no basis to complain of difficulty in doing the same thing with all the legal luminaries in the Attorney General’s Office.
In view of how government is guarding leads to clear corruption cases, it is clear that corruption will flourish in Ghana in the years to come and given that we cannot renounce our middle income status to get more concessional loans and grants to satisfy the elevated taste for corruption, government is likely to introduce more and more taxes and drain resources meant for infrastructural development to finance it.
If we all keep quiet, the revenue we will accrue from even the newly introduced taxes and the increment of the existing ones will all get into the drain as the colossal sums of foreign aid did – we will all end up doing a bull’s sacrifice and this is where public protests, demonstrations and agitations come in.
Rescuing the Soul of Ghana through Public Protests & Demonstrations
Beside elections, the only language politicians understand is public protest and President Mahama particularly acknowledges this. This is what he posted on his Facebook wall on 8th April, 2014:“If the Arab Spring has taught us anything, it is that, it is no longer acceptable to be ambivalent about the needs of the poor and marginalized in our societies”.
Every Ghanaian living everywhere must put pressure on our politicians through writing and other means, let them have nightmares, feel restless and occupy their minds till we see real change – not a chameleon one. More bi-partisan protests like the Occupy Flag Staff House, Red Friday and Trade Union Congress demonstrations are extremely necessary.
If they do not reduce rent seeking and corruption (our development nemesis) then they should not be allowed to rest – they must be tormented through such lawful and peaceful protests to deliver. Why must politicians always appear to be working only when elections are drawing nigh? They can be forced to deliver even when there are no elections and lawful and peaceful bi-partisan public protests is one of the surest ways to ensure this!
Honestly, I must admit that this will not be easy, the politicians will respond – they are rational beings – as we say in the local dialect “they will feel that we are taking away their mouth food from them”.
Their communicators and apologetics will come for us, they will call us all sorts of names – that our pay masters are remote-controlling us and even trivialize our genuine views as gloom, doom, despondency and hopelessness being foisted strenuously onto the nation. However, we must note that all these will be part of their short term ring fencing mechanisms to break our fronts so that they can continue eating rich in satisfaction while we starve in search and sacrifice.
Ghana should change dramatically to become the Ghana we all want it to be if we are able to advance and sustain this cause.
God bless our homeland Ghana