Election 2016 Issues

NEWS COMMENTARY ON THE DRIVING FACTORS OF THIS YEAR'S PRESIDENTIAL ELECTION 

The election year of 2016 comes at a very pivotal time in the history of the 4th republic. This election is just after the first constitutional review activity done in 2015. It also comes right after the Ghanaian economy has begun a slow recovery from a two-year energy crisis that has slowed down economic growth. Significant in this dispensation has been the need to rely on the Supreme Court to clarify certain landmark cases related to governance and corruption, which still remain key attributes in determining the suitability of a political candidate. Against this backdrop, expectations of the nation hinge on a matrix of intermingling objectives that they view as crucial to determining a winning candidate for the 2016 election, and the preparedness of that candidate to tackle pertinent issues that will arise. 

One such issue bothers on governance. The discussion of governance presents a myriad of sub-themes which have piqued the interest of many-a-voter. Voters expect any upcoming government, be it the incumbent or an incoming one to take the issue of corruption very seriously and with a very swift and firm hand.  Public confidence in most government and state-appointed officials has been eroded with successive reports of flagrant scandals involving massive impropriety. As a matter of fact, the inability of Ghana’s parliament to accelerate the passing of the freedom of information bill almost a decade and half, compared to the speed with which the same parliament passed multi-million dollar bills overnight and intended to pursue a communication bill that was designed to eavesdrop on electronic communications clearly indicated to the interested public that where there is motivation, the legislature can indeed rally around and pass bills. Governance will be seen to only advance with the passing of the Right to Information Act, as well as the ability of the next government to swiftly deal with the inability of the Auditor-General to bring the hammer down on abuses that have been discovered, of which excesses are into billions of cedis.  Perhaps, the most important success factor in the 2016 elections will be matters of the pocket. The turbulent nature of the domestic energy situation exacerbated an economy smarting from the effects of all-time high crude oil prices. 

Another major niggling negating factor was a fall in the international price of cocoa, one of Ghana’s highest foreign exchange earners. For any economic management team, this is a murderous cocktail of negative externalities that will sink most countries into distress. With expected revenues from oil falling by as much as 45 percent  from a high of 110 dollars  per barrel in 2014, to 75 dollars in the latter part of 2015, and further falls to around 50 dollars, representing 3 year lows, the projections of oil based revenue have diminished. It is quite obvious that Ghana was relying too much on proposed oil revenue without looking much into diversification of the economy, almost falling prey to the Dutch Disease in the process.  Sharp drops in combined growths from 13.5 percent in 2013 to half of that in 2014, and the shrinking of growth further to 4.9 percent and a projected 3.2 percent in 2016 is a clear indicator of poor year on year growth in GDP, in spite of increased government debt from both local and international capital markets. The depreciation of the cedi by more than 20 percent  in 2015 made an even bad situation worse because imports became even more expensive to procure, industries dependent on imports and petroleum had ballooning costs, and in 2016 these wounds have deepened by what in some cases is a threefold increase in energy bills. The freeze in capital meant very little in terms of local savings and therefore local investments. 

Unless there is a radical shift in the fundamentals, most small businesses are not going to expand and consolidate but will rather go into bare bones mode, where demoralisation will be essential for survival. This will even make tax and revenue assurance all the more difficult as businesses virtually run off the grid.  Based on the current track record in terms of taxation policy, should the ruling government still remain in power, it must with tact and speed reverse the very retrogressive taxation schemes it has adopted annually to raise revenue. The opposition parties must assure every Ghanaian, local and international investors that they will chart a new consultative path to defining the limits of what can be efficiently taxed to spur economic development.

Simply put an optimal tax regime must define any political ambitions to raise more revenue.  

BY FRANKLIN CUDJOE, FOUNDING PRESIDENT AND CEO OF IMANI GHANA