Third, final rematch: What role will economy play?

BY: Maxwell Akalaare Adombila

It is a calm Sunday evening at around 6.30 p.m. in Bogoso in the Western Region but the boisterous political crowd in the centre of the age-old mining town cannot pass for notice.

In their traditional white and blue attire with occasional red to spice it up, supporters of the ruling New Patriotic Party (NPP) have massed up in jubilant mood at a rally in which the party’s flag bearer for the 2020 general election, President Nana Addo Dankwa Akufo-Addo, is in attendance.

“We have delivered on our promises and we have managed the economy better,” President Akufo-Addo said forcefully, while addressing the crowd from the presidential podium where he occasionally rested his arms on the deck in his signature fashion.

His fourth shot at the presidency after a third successful attempt, Nana Akufo-Addo is hoping he would be retained on December 7 to finish off his tenure and, in his own words: “build on the solid foundation laid in the first term”.

But first, he must beat former President John Dramani Mahama, his predecessor and now his lead contender for the presidency.

Around the same time when President Akufo-Addo was selling his track record to the crowd at Bogoso, former President Mahama, who is the flag bearer of the National Democratic Congress (NDC), was also in Damongo in the Savannah Region – about 700 kilometres away – telling his supporters the opposite.

Dressed in a khaki trouser over a white long-sleeved shirt, the former President told the crowd from a tripod-held microphone that the Akufo-Addo administration had mismanaged the economy such that living standards had fallen, key macroeconomic indices had deteriorated and corruption had peaked.

In a clarion call that has become typical of his campaign messages, Mr Mahama , who rose from Member of Parliament (MP) through Vice-President to become President between 2012 and 2016, then intimated that the NPP needed to be voted out for the NDC to return and create equal opportunities for all.

Focus on economy

Two sides of the same coin, the divergent positions are the narrative that has characterised this year’s campaigns across the country in the run-up to the crucial poll on Monday.

It is a contest in which everything is at stake – from bragging rights to party and personal pride and the quest for an opportunity to translate series of policies and visions into reality.    

At the centre of it is the health of the economy – a GH¢398 billion sovereign wealth that was expanding at an average of seven per cent per annum since 2017 until the novel Coronavirus (COVID-19) cut it to 1.9 per cent this year. That growth was largely non-inclusive, fuelled mostly by a burgeoning oil and gas industry and an age-old mining sector that produced the world’s largest gold in 2018.

Now hit by the pandemic, the economy has faltered, bringing with it a fortune and a misfortune for the Akufo-Addo government.

When the viral spread crashed growth, reduced revenues and put livelihoods at stake, the government resorted to borrowing to plug the revenue gap and fund social interventions meant to cushion the citizens and stimulate private sector growth.

For election purposes, these are positives but they also create other economic problems – high debts and a large fiscal hole. In 2019, debt levels climbed to GH¢218.2 billion (62.4 per cent of gross domestic product (GDP) and the budget deficit closed at 4.8 per cent of GDP, a percentage point higher than targeted. Now, the debt stock is GH¢273.8 billion (71 per cent of GDP) and the deficit was pegged at 11.4 per cent of GDP – almost triple its earlier target in July.

Debt politics

For other economies, these may mean less in political campaigns, but not in Ghana. Since 1992 when the NPP participated in its first competitive elections, the economy has virtually been the fulcrum of campaign messaging, with the party positioning itself as better managers, private sector-minded and prosperity-driven.

That assumed a new dimension in 2008 when Dr Mahamudu Bawumia came into the scene as Running Mate to then Candidate Akufo-Addo. An economist and a former Deputy Governor of the Bank of Ghana (BoG), Dr Bawumia staggered in his first campaigns but soon mastered the art and became the guy to beat in the 2012 and 2016 elections.

With the economy as his focus, he criticised what he described as excessive borrowing, mismanagement of the exchange rate, large fiscal deficits and the general state of the economy while trumpeting his party’s credentials in sound economic management. He also munched on to corruption, often creating a link between the resources made available to the government at the time and the quality of lives of the citizens.

These became big selling points, especially in the 2016 campaign that ultimately brought the NPP to power. Now in government, Dr Bawumia and his boss are taking the same bullets from former President Mahama.

“This government is the worst government in our history; it has borrowed more than all the governments we have had since Dr Kwame Nkrumah yet they have nothing to show for it,” he said at Damongo in reference to the doubling of the public debt from GH¢122 billion in December 2016 to GH¢273.8 billion in November this year.

He then insisted that while he borrowed GH¢56 billion to build visible infrastructural projects, the Akufo-Addo government had borrowed more than GH¢150 billion yet had nothing to show for it, except toilet facilities.

The impact

While these are good talking points for supporters, it is not clear if they can invoke enough sentiments to cancel out the government’s insistence that it had stabilised the economy, taken the country out of the IMF programme, implemented more inclusive social intervention programmes (chief among them being the Free SHS) and built infrastructure across the country.

Polls and surveys are not particularly popular with elections in the country but the few that have been conducted ahead of December 7 show that most voters were keen on education, the economy and jobs.

To be fair though, this campaign did not weigh heavily on the sometimes mundane economic indicators; infrastructure, believability and ability to execute one’s campaign promises eclipsed the debate on deficit, debts, exchange rate and inflation until in November when Mr Mahama started zeroing in on borrowing and the government’s handling of the financial sector clean up exercise.

That exercise, which the government touts as a bold effort that purged the sector of illiquid and contagious institutions and also created a sound and resilient industry has imposed a GH¢23 billion fiscal burden on the economy – an expenditure item that is controversially treated outside the fiscal deficit.

With December 7 just here, it is obvious that many voters have made up their minds by now. Their decisions may have less or much to do with the general economy but it will surely determine who among the NPP and the NDC manages it post-COVID19 (from 2021 onwards), when the impact of the current debt overhang, the impact of the freebies on the deficit and the recovering growth prospects would have come home to roost.