Despite President John Dramani Mahama’s firm conviction and assurance to Ghanaians and the various stakeholders who attended the Senchi National Economic Forum (NEF) that his government will exhibit the same sense of urgency the participants have approached the discussions to solve the nation’s ailing economy, exactly two months after the summit, Ghanaians are yet to see the full content of the report much, less efforts at its implementation.
Vice-President Paa Kwesi Amissah Arthur, the brain behind the forum had promised that the full content of the 22 points communiqué that was agreed by the participants will be available in a matter of two weeks after the end of the forum, which started on May 12, and ended on May 15 this year.
Various prominent individuals, civil society organizations, the media and political parties have been piling severe pressure on the government to at least make the report available to the Ghanaian population before the issues of implementation could even be discussed.
However, the office of the Vice-President has maintained legendary silence while the President and the government are daily pummeled in the media for incompetence in both the management of the economy and the delay in coming out with the Senchi report.
A source at the Presidency told The Al-Hajj that “President Mahama has put all his hopes on his vice-president and his Economic Management Team to coordinate and lead all activities relating to Senchi because of Amissah Arthur’s strong background on the issues relating to the economy, but indications are that the President feels let down, just as he has been disappointed in the way the economy is being handled by the economic management team.
The Mahama government’s economic management team is led by the Vice-President and ably supported by experts including finance minister Seth Terkper and the BoG Governor, Dr. Henry Kofi Wampah.”
It is not clear which of the economic management team member would be affected by the impending musical chairs in government as the President last week sounded the alarm bell to all his appointees to be ready for a massive shake up in government.
President Mahama, according to our reliable sources has written to all his appointees apart from the Vice-President to be ready for the forthcoming radical changes in government to help revitalize the administration and resolve the ongoing economic crisis that has rapidly reduced public confidence in the NDC government.
“The President’s promise at the end of the forum to fast-track the implementation of the 22 communiqué was hinged on his absolute confidence in the capabilities of his vice and his economic managers, but just as with the economy, the team seems to have taken a lackadaisical attitude towards the Senchi forum report,” the source added on condition of anonymity.
“I am satisfied with the outcome of this forum and I am impressed at the zeal and enthusiasm you have shown over these last three days.” President joyfully told the participants at the end of the Senchi forum.
According to him, some of the proposed solutions proffered by the stakeholders are “far reaching” and his government will take the necessary steps to immediately implement the recommendations.
President Mahama made these remarks at the closing ceremony of the National Economic Forum at Senchi in Akosombo where a hotchpotch of Ghanaian citizens gathered to brainstorm on the remedies of the economy that has been buffeted by one of the severest galloping inflation and currency crisis in the nation’s economic history.
Re-affirming his confidence in the capabilities of his Vice-President, President Mahama extoled the virtues of His Excellency Amisssah-Arthur, with special thanks for his huge role in the organization and participation of the National Economic Forum (NEF).
“I wish to take this opportunity to thank my Vice-President Kwesi Amissah Arthur for all the hard work, time, and dedication that he has invested in this forum. The leadership and other contributions that he has made to ensure the success of this forum is not short of exemplary,” president Mahama stated.
The three-day forum, organized by government under the auspices of the Vice-President and head of Economic Management Team, His Excellency Paa Kwesi Amissah Arthur, brought together heads of institutions and organizations, former Governors of the Bank of Ghana (BoG), former Finance Ministers, government officials, Civil Society Organizations (CSOs), political parties excluding the New Patriotic Party (NPP) and some policy think-tanks.
The participants, who enthusiastically gathered at the upscale resort at Senchi in the Eastern Region, were tasked to deliberate and prescribe effective remedial measures that could urgently guide the government and its economic handlers to chart a new course that would solve the macro-economic challenges the country is currently grappling with.
President Mahama assured Ghanaians that the government’s economic management team has been re-invigorated by the forum, and it would be used to chart a new direction towards short term economic stability and economic transformation in the medium to long term.
However, two months after the Senchi forum, government has been giving excuses upon excuses for the delay in the release of the report much less its implementation.
The Trades Union Congress (TUC) led in urging government to come out of its slumber regarding the Senchi Forum and make public its findings to help prevent the economy from further bleeding.
Drawing attention to the deteriorating economic situation, the TUC said policy changes recommended in the Senchi consensus can address the short, medium and long term challenges confronting the economy and therefore urged government to make the full report available to the general public.
In an interview with Radio Ghana, the Secretary General of the TUC, Kofi Asamoah urged government to take steps to implement the Senchi consensus as it makes effort to address the challenges confronting the economy.
Retired Ghanaian diplomat and statesman, Mr. K.B. Asante, also described as “terrible” the delay in the presentation of the full report on the Senchi Consensus.
Mr. Asante made these remarks when he spoke at the 5th Great Conversation on Africa and Mentorship School 2014, an event put together by governance and leadership development organization, Passionate Africa Initiative.
“I read in the newspapers this morning that the report will be out sometime next week. I questioned whether they were really serious?
…Haven’t we got young men and women at the ministry to write reports? During Nkrumah’s era, if we meet today, tomorrow the report must be ready,” the experienced diplomat was quoted by the Today newspaper.
It will be recalled that Vice-President, Paa Kwesi Amissah-Arthur, disclosed during a meeting with a Swiss business delegation days after the forum at the Flagstaff House that the full Senchi report will be made available to the public two weeks after the forum.
This, Mr. Asante stated, tells the level of “seriousness attached to the forum.”
The former Secretary to Ghana’s first leader, Dr. Kwame Nkrumah, said such important events should have a blueprint which should be discussed and modified as debates go on, adding that it should not take three weeks for the full report to be published.
“Look, before you hold a big conference at Senchi, you prepare. If you don’t prepare then you are not serious,” Mr. Asante stressed.
He wondered how long it will take for the implementation of the report considering the length of time it is taking for the full report to be published.
“If you are taking three weeks to write this report then when are you going to implement the content? …it’s terrible,” he noted.
He advised government to be more serious and act quickly if it is concerned about developmental issues.
As the economy continues its unstable trajectory, The aL-hAJJ can report of a seeming tension between the embattled Governor of the Bank of Ghana (BoG), Dr. Kofi Wampah and beleaguered Finance Minister, Hon. Seth Terkper, on who should take responsibility and what direction should be taken to stem the tide of the Cedi depreciation and restore macro-economic stability
Henry Kofi Wampah, the BoG boss last week demanded stronger action from the Ministry of Finance and government to alleviate the country’s economic predicament, which so far appears to have defied all the monetary tools administered by the central bank.
“Fiscal consolidation will require a more aggressive stance in the second half of 2014. Government must continue to enhance revenue measures and rationalize expenditures to achieve the fiscal deficit target of 8.5 percent of GDP for the year,” He said, in his latest monetary policy briefing in Accra.
According to the Business and Financial Times, “his call is set to intensify pressure on Minister of Finance Seth Terkper to revise his budget for the year and launch new measures to accelerate the ride to economic recovery”.
Mr. Terkper is expected in Parliament on Wednesday to present the Mid-year review of the budget and supplementary estimates for the fiscal year 2014. This move is one of the key recommendations of the Senchi Forum. Although, this is not the first time the mid-year review of the budget is presented to the august house, the 2014 one is extraordinary given the yawning gap between the various estimates predicted in the 2014 budget and the actuals, less than eight months into the fiscal year. Provisional data show that, almost all the estimates and targets made in the 2014 budget have been missed by wider margins even as we are mid-way to the end of the fiscal year.
“Mr. Terkper is battling a (budget) deficit that remained above 10 percent of GDP for a second consecutive year in 2013, causing interest rate to spike to new records while boosting inflation and dampening confidence in the country’s currency.
“Risks to the fiscal outlook have increased on account of underperformance of government revenues, the rising share of compensation for employees in domestic revenues, and the increasing difficulty of raising financing from traditional sources,” Wampah said.
“The situation is further compounded by the emergence of subsidies due to delays in adjustment of petroleum and utility prices; build-up of arrears, particularly on statutory payments; delays in the implementation of some revenue measures outlined in the 2014 budget; and slow disbursement of programme grants.”
He said the Monetary Policy Committee (MPC) of the bank voted to increase the policy rate from 18 percent to 19 percent to tackle inflation and the cedi’s worsening depreciation.
The 19 percent rate is the highest since February 2004 and sends a signal that monetary policy is nearing the end of its tether in the search for solutions to restore economic stability.
The BoG has launched a raft of administrative and policy actions since February targeted at easing pressures on the currency and foreign exchange reserves. The cedi has fallen by about 27 percent to the dollar since January, according to the Monetary Policy Committee (MPC) report. This is its fastest slide in 14 years.
The Gross International Reserves have also decreased by US$1.1billion to US$4.5billion in the same period, further putting unbearable pressure on the local currency.
Surging inflation has also produced anxiety for the Bank of Ghana, which has traditionally aimed to keep it below 10 percent, the so-called single digit inflation.
Data issued on Wednesday by the Ghana Statistical Service (GSS) showed prices rising at an annual rate of 15 percent in June. That pace of growth is the highest since December 2009, when government was battling rising inflation brought about by the 2008 election-related economic instability.
Dr. Wampah said inflation is not likely to return to the central bank’s preferred range of 9.5-11.5 percent until the final three months of 2015. He was however more upbeat about the currency as the central bank expects to receive around US$3billion of foreign exchange from the upcoming Eurobond and cocoa syndicated loan.
However a source at the Bank of Ghana told the Al-Hajj that the anticipated US$3bn in the second half of the year would be woefully inadequate to meet the rising import bills that have bedeviled the economy in recent years.
“Yes, we are getting the US$3bn in the second half of the year to support our balance of payment and increase our reserves. But this would be just a drop in the ocean given the pressure on the Cedi and so we should be careful on how we whip up people’s expectations. The issues have to do with fiscal policy, domestic revenue collection and rising imports. The money will come exactly at a time that the economy would face the seasonal end-of-the-year festivities such as pilgrimage to Macca and Christmas. These often put severe pressure on the Cedi,” the source pointed out.
On July 1 this year, protesters calling themselves Concerned Ghanaians for Responsible Governance quickly mobilized through the social media and marched on the Flagstaff House to submit a petition listing a whole array of grievances against the government. These include corruption, decline in the strength of the currency and general deterioration of the economy.
The protesters also cited electricity shortages, poor roads, high taxes, unfunded public schools and hospitals, among their concerns. They called for urgent action from the President and members of government to restore order and sanity to the economy.
The IMF in a diplomatic but strong language has also on many occasions criticized the government’s handling of the economy and has urged for more credible fiscal consolidation measures.
Experts have told the Al-Hajj that the development partners’ unwillingness to release the badly needed financial support to the economy was because they do not have faith in the raft of administrative, fiscal and monetary policies the government is implementing to restore economic stability.
Mr. Terkper recently told the B&FT that government is implementing a multi-year fiscal consolidation strategy and has done enough in the first two years (2013-14) to stabilise the economy, a claim many pundits have doubted given the continuous rapid increase in inflation and currency depreciation.
Again, speaking on Joy FM last week, the embattled finance minister, Mr. Seth Terkper described as unfortunate, criticisms that efforts being made by the managers of the economy to address the present economic hardship are not effective enough.
The minister’s so-called homegrown policies have come under severe criticisms for lacking credibility in the eyes of both local and international partners and therefore been unable to correct the current economic malaise.
However, according to him, although short-to-medium term policies are being implemented to manage the situation, many of the actions being taken currently are likely to produce positive results only in a few years’ time.
However, critics have argued that any effective and credible fiscal consolidation policy would have seen both Cedi and inflation brought under control by now.
“We should have seen at least some signs of turnaround and reversal of the macro-economic environment after the first four to six months of implementation if the home-grown policies are credible enough. At least the currency should have been stabilized and inflation should have also begun decelerating in the first six month of 2013. However, almost a year and half, these two key indicators are rather jumping on the roof tops. So, there is the need for a change of direction by the managers of the economy,” a source at the Ministry of Finance told The aL-hAJJ on condition of anonymity.
Last week, the Bank of Ghana (BoG) was dragged to the Supreme Court over the rapid depreciation of the currency. A private legal practitioner, Dr John Ephraim Baiden was reported by the Daily Graphic to have asked the court to order the bank to put in measures to provide a stable currency.
“According to the plaintiff, the BoG was enjoined by the 1992 Constitution and the Bank of Ghana Act to maintain a stable currency for the benefit of Ghanaians and businesses.
The plaintiff, who brought the action in his capacity as a Ghanaian who has lost wealth through foreign exchange rate losses, is pleading with the court to direct the BoG to provide a stable currency,” the Graphic report stated.
Similarly, a Member of the Finance Committee of Parliament and NPP Member of Parliament for Juabeng South, Dr. Mark Assibey-Yeboah also recently called for the resignation of the Governor of the Bank of Ghana for his handling of the ongoing currency crisis that have seen many international financial experts adjudging Ghana’s currency, the Cedi as the worst performing currency so far in 2014.
Speaking to Joy FM, Assibey-Yeboah is accusing the Governor of the Bank of Ghana of sleeping on the job and must resign.
According to him, Dr Kofi Wampah has shown gross incompetence in the handling of Ghana’s currency and “must take a bow.”
Dr. Assibey-Yeboah said the country has had enough of a “sleeping” Governor on duty.
“He has done his bit, but he is not up to the task,” he chided, adding the country’s currency will deteriorate further if the Governor stays in office.
He said all the interventions by the Governor are not working because there is no “better research underpinning” the interventions.