On 21st January 2022, Fitch Ratings downgraded Ghana’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘B-‘ from ‘B’. The Outlook is Negative according to the credit rating agency.
Fitch under its rating drivers of Ghana noted that “the downgrade of Ghana’s IDRs and Negative Outlook reflect the sovereign’s loss of access to international capital markets in 2021, following a pandemic-related surge in government debt. This comes in the context of uncertainty about the government’s ability to stabilize debt and against a backdrop of tightening global financing conditions. In their view, Ghana’s ability to deliver on planned fiscal consolidation efforts could be hindered by the heavier reliance on domestic debt issuance with higher interest costs, in the context of an already exceptionally high-interest expenditure to revenue ratio”.
The University Teachers Association of Ghana (UTAG) has been on an almost three weeks old strike over poor conditions of service. Just yesterday, the College of Education Teachers Association of Ghana (CETAG) called off a similar action after weeks of being in tango with the government. The Civil and Local Government Staff Association of Ghana (CLOGSAG), declared an indefinite strike on Thursday, January 20, 2022, until the same was called off a day or two ago. Drivers in the country are up in arms over incessant increases in transport fares without being allowed to extend the burden to their customers.
In the education sector, textbooks for the new curriculum are unavailable according to the various teacher unions. The Conference of Heads of Assisted Secondary Schools, CHASS recently alerted of shortage of supplies which they said will adversely affect the effective functioning of the schools. The finance minister is still trying to convince Ghanaians of the need to accept and approve the controversial electronic levy as a major source of revenue for government expenditure in the year 2022.
Student loan beneficiaries are still wondering when the government will release funds for the loans to be disbursed. The Nation Builders Corps (NABCO) employees of the government have over four months of their stipends in arrears. Ghana Public External Debt is projected to trend around 26000.00 USD Million in 2022 and 24700.00 USD Million in 2023
Except for the few who claim everything is fine, most Ghanaians are facing the stark reality of a crumbling economy. Something might be wrong somewhere but we must keep hope alive for that’s what we have always done.
In November 2019, a research by the director at the Institute of Economic Affairs (IEA) Ghana, Dr. John Kwakye, revealed that Ghana’s natural resources including gold, oil, gas bauxite, manganese, and iron ore are worth over $12 trillion. This is the country in dire financial need. A country that cannot honor statutory obligations and a country whose citizens struggle to get a meal a day. What a reversal of fortune.
The Ghana Revenue Authority (GRA) has said that it exceeded its revised revenue target of GH¢42,769.50 million for last year by mobilizing GH¢45,338.69 million. The performance of the Ghana Revenue Authority seem excellent in recent times. Consistently, our natural resources, revenue collection mechanisms though there are still some loopholes, seem to be doing well.
The major sectors of expenditure of the government are health and education. However, the expenditure in these two sectors is in reality far lower than the wastage occasioned by the government and its appointees.
Why then do we always need money and resort to loans from developed countries in addressing our challenges as a developing country?
The extravagant expenditure of the government and its appointees on unnecessary and irrelevant trinkets to the detriment of creating an enabling environment for businesses to thrive, which will, in turn, solve the challenge and pressing security threat of unemployment is an area open to researchers.
According to Peter C. Sederberg, on initial appraisal, government expenditure appears to be an excellent indicator of an important range of political motives and objectives. This according to him would seem to be true, particularly in an underdeveloped country such as Ghana, because of the importance of economic development in the leadership’s goals and because of the role usually assigned to the government in promoting such growth. Expenditure should reflect governmental attitudes toward social and economic priorities, which in turn give some indication of existing political values and realities he noted. To him, Changes in expenditure patterns should be one measure of political change. The expenditure of government on political campaigns, upkeep of government appointees, and article 72 officeholders is the bane of Ghana’s economy.
Bribery and corruption
According to transparency international, Ghana ranked 75/180 and scored 43/100 on the corruption perception index in 2020. On the global corruption perception barometer, the perception of people who thought corruption increased in the past twelve months before 2020 is 33% and the perception of public service users paid a bribe in the past twelve months is 33%. The fact however is that these are refined data. Ghanaians do not need transparency international to tell them that companies are subjected to bribes when operating in rural areas, contracts are sold, opportunities are given on whom you know basis and not based on competence, illegal monies are collected by police officers on our roads daily, government appointees and officials openly give monies to electorates to be voted for or accepted into office. Corruption is eating deep in Ghana and leaders in the fourth republic are helpless and cannot fight the canker.
The re-introduction of courses like religious and moral education into the school curriculum at the basic and possibly second cycle levels of our education is at this time necessary. The courses should be designed to instill positive virtues in our students and children and avoid acts that are inimical to the development of the country like bribery and corruption.
Government expenditure must be strictly regulated and monitored by statutory institutions. The current situation where parliament pretends to act as a watchdog over the executive and the executive the same over parliament which often results in part my back and let me part your back is unacceptable. An institution must be set up to exercise oversight over both parliament and the executive without fear or favor.
The financial class society created by labeling some public officers article 72 officeholders with unacceptable ridiculous high levels of salaries must be relooked at.
Finally, the punishment for bribery and corruption must be severe enough to serve as a deterrent for those who might want to engage in the practice. Firstly, any property acquired through corrupt activities must be confiscated by the state with those involved not being eligible to hold any public office among others.