Living within, not beyond our means (1)
The big guns have fallen silent; the institutes have taken a hasty sabbatical; the centres have gone off centre; the think tanks have stopped thinking; the professors have stopped professing and the experts have stopped pontificating on that of which they know little.
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The Ghana cedi has encountered its latest attack of nose bleeding and the usual suspects have been most conspicuous by the eeriness of their silence.
As nature abhorring vacuum, the void has been quickly filled by the purveyors of darkness. The monocular commentators are trading garbs about whose stewardship was responsible for the fastest and longest bleeding of the currency on record.
Ironically, they agreed on the solution, namely to do that which we have failed to do for nearly 60 years, viz. to change the fundamental structure of our economy. As this remains as elusive as the scarlet pimpernel, the poor cedi will bleed to death before the emergency ambulance arrives to deliver the needed first aid.
The men from Manpoliwawa are not proving to be any better either. They are spinning years about how other global currencies are suffering from more bloodied nose bleeds than Ghana’s and reassuring us that even if we should bleed to death, our demise will come more slowly than the others, surely as it shall come.
Three concrete actions have been taken to stop the cedi’s nose bleed. The first has been a pastoral plea to God the Creator. The intercessory command of His earthly servant to levitate the cedi clearly failed to take account of Ghana’s homespun laws of gravity, namely that when the cedi goes down, it never comes back up.
The Governor of the Bank of Ghana remembered that we have had laws since 2006, which, if implemented on a sustained basis, would have prevented the current profuse nose bleed. Never mind the WWWs, life, it seems, never changes and prevention will always be better than instant panic cures.
There are two problems with the governor’s prescriptions, namely sustainability and wholesomeness. The first has to do with the fact that the measures contained in the 2006 Act are meant for all time, not three months doses of emergency treatment. Until such time, as we accept that the cedi is and must always remain the legal tender in Ghana, we will be doomed to perpetual nose bleeds, with the occasional “totototo” flow.
By failing to close forex bureaux and other avenues for getting dollars within Ghana, the governor has accelerated the bleeding of the cedi. All those who have had their legitimate dollars snatched from their accounts by the state and others who simply see the dollar as the safest haven in troubled times, have adopted another of life’s everlasting adages of “once bitten……
The cedi’s nose bleed has increased inflow since the governor’s prescriptions. Where God the Son has declined to step in; it seems Allah has been coerced into doing so; albeit with the opposite effect. Never mind the fact that the insignia “In God We Trust” is embedded inscrutably in the dollar, anybody who needs or wants United States’ dollars for real has to turn to the Mallams of the Zongos, both legit and otherwise, and murmur a penitentiary “Allah Aqbah” in both hope and expectation.
The cedi has lost more than 10 percentage points since the governor reintroduced the ‘confidence building measures’. It takes GH¢3.00 to get one available US$1.00 to put under the mattress. The cedi has slipped from GH¢1.90 from February, 2013 to GH¢3.00 today; a drop of 58 per cent. And all that those we have elected to govern in our name can do is to throw their arms up in the air and blame everyone else but themselves.
Those who seek solace and comfort in the restructuring of the economy as the panacea for our current ills are dreamers and escapologists. We have been talking this since 1924, when Guggisberg first drew our attention to it. Nearly 60 years into taking charge of our own affairs, we are still talking restructuring and carrying on in our own way; simply trotting out the mantra each time we hit a road block.
“Don’t talk it, Do it” was the message on my entry door at the VRA. It does not matter that “Girls kasa”. The men have shoved the women away from doing what they are clearly better at doing than we men. As Margaret Thatcher put it: “Any woman who understands the problems of running a home will be nearer to understanding the problems of running a country.”
Ghana’s cedi is bleeding profusely because the management of our economy is in the hands of men who think talking plenty at the ‘omo tuo’ spots washes away our problems in the same way that the beer makes the ‘tuo’ go down smoothly.
This nation Ghana and its people should finally apply what we have been schooled so much in that most simple and humbling of adages, “we must live within, not beyond our means. And not just that, we must do so now, not postpone it to another day; so they can pass on the matter to a future lot after they have plagued and plundered the resources meant for improving the public good to satisfy the private greed of the few.
Fitch, the people who downgraded our ratings to B-, was distinctly unimpressed by our recent actions. They pointed to the lack of any substantial action to cut off the tumor causing the incessant bleeding. Ghana’s national debt is unsustainable because of the country’s high wage bill. The Minister of Finance announces SSSS has cost GH¢8 billion and offers no solution to keep it under control.
The men from Manpoliwawa seek solace in the percentages of proportions of our economy that constitutes debt. It offers the hollow comfort that some other countries have debts that are more than 100 per cent of their GDPs. There is a vast difference between borrowing money to chop-chop and borrowing to add value and wealth so you make enough to be able to pay back the loan and end with a tidy profit.
Spending “waa waa” to pay folks for doing no work; eating ‘papaye’ at countless workshops and seminars; taking sitting allowances for doing that which you are paid to do already; buying gas guzzlers while restoring GV number plates; all amount to literally throwing Ghana’s money down the drain. When we borrow money to feed our consumptive lifestyle, instead of using the money to increase the wealth of the nation, we will never be able to stop the cedi’s nose bleed.
In 2013, Ghana’s GDP was estimated at US$43 billion. That of the UK was US$2440 billion. There are over 600,000 civil servants in Ghana. The UK has just over 400,000. The UK used 50 per cent fewer civil servants than Ghana to produce wealth of nearly 57 times or 5700 per cent bigger. More than 70 per cent of the revenue we collect annually goes into wages and emoluments. Even monies raised specifically for social interventions are diverted into emoluments.
Mr President, please note; the answer to Ghana’s problems is dangling before your very nose, which I suspect is not as bloodied as the cedi. I was hoping your special cabinet meeting would take the governor’s invitation to do your bit in support of his. You failed and instead marked the governor’s effort with the Manpoliwawa classic of “A+++ could do better”.
Mr President, you can run but you cannot hide. If you don’t know, ask. In the next installment, I will offer my two pesewas worth on the Tarzanomics of cupping the cedi’s nose bleed now, instead of the appropriate time.
The writer is Chief Policy Analyst Ghana Institute for Public Policy Options, GIPPO
Email: [email protected]