Franklin Cudjoe ends American Trip; read his Important Notes here
As my visit to the United States comes to a close, here a few highlights of the past week
1. The US-Africa Leaders Summit was successful. Deals potentially worth $37bn were announced. US government commits to a near $4bn ($110m annually over 3 to 5 years) to combat the rise of terror gangs and beef up security on the continent. Ghana, alongside 5 others will be the pivot around which this initiative will be deployed. Private investment deals worth $33bn were announced with IBM and Coca-Cola leading the way.
There were very important meetings on extractives, governance and democracy. Mo Ibrahim was enchanting and bullish about investment in Africa and talked tough about lazy African leaders. George Soros spoke on mining contracts although I disagreed with him on the issue of weak capacity responsible for bad and dodgy mining contracts in our parliaments. The continent is awashed with competent legal brains to help truth-loving governments deal with multinationals who will out of self-interest like to get sweet deals. It takes two to tango, it takes two to steal resources and all will happen when you have rubber stamping parliaments and an over bearing executive presidency as most African countries do. And it seems,it is actually time to review all the governance indexes on the continent. We will begin with Ghana and how she has fared on the Mo Ibrahim Index since it’s inception.
My Take: $4bn US money to fight terror may be helpful, but that’s pocket change for the continent’s greatest den of thieves, for example, Nigeria, that blew nearly $50bn of oil money in a single year on corrupt schemes. That figure amounts to nearly 60% of all aid that went to Sub Saharan Africa in a year. Besides, peace is a commodity that can only be achieved or produced when the ingredients of good governance are spiced with accountable leadership. If the US is serious about fighting corruption in Africa, it may want to commit African countries it gives money to mandatorily adopt the Open Government Initiative and be forced to submit information on all government expenditure and procurement practices instead of the current voluntary basis. I am however happy that the private investment deals if done well will spawn development and reduce unemployment.
2. Ghana signed the second Millenium Challenge Corporation compact with the US for $498.2m to disbursed over 5 years in order to boost our energy sector. Ghana government will come up with 7% counterpart funding for the project. It will take nearly 9 months before significant amounts would be disbursed. By mid 2015, only $34m would have been used for setting up the second compact in terms of administration, hiring staff etc. Nonetheless, the good thing about this compact is its watertight procurement processes which leaves virtually no room for political maneuvers and corruption. I have urged the MCC team leader here in the US to ensure that there is active civil society participation to check and balance all players, including the US side too. After all, that is what US Vice President Joe Biden under think tanks to do.
Opportunities and Tasks
IMANI will voluntarily be reviewing the first MCC compact that financed the N1Highway and other agricultural related projects with a view to creating a hand book to guide other MCC projects in Africa but crucially apply good management and procurement procedures under the compact to overall government business. It is evil to have governments sole-source procurement matters that end up creating crony capitalist scams which eventually never deliver.
IMANI will attempt to help in the preparation of a guidebook for implementation of compact 2. This is the only way we can make businesses account and be part of our development processes.
Yours truly shares this passion for the nexus between government, civil society and businesses so much and my resolve to see this in practice has been boosted by my appointment to the Danish International Development Agency’s Board for Private Sector Development with a budget of US$78m for the sector. Our task will be to advice the Danish Government on how we can generate inclusive economic growth through sustainable and decent job creation in Ghana. My immediate thoughts for DANIDA is that since mining, banking and telcoms and many blue chip companies are becoming automated and whilst they remain important sources of revenue, it will not be the future of employment. Agriculture remains the key for labour and employment. We will have to do more to export non-traditional exports so we can earn more forex. NTEs earn us 40% more revenues than cocoa. And that is the future.
3. Ghana and the IMF
Ghana will this week turn to the IMF for a bail out. President Mahama feels shy to call it a bail out in order I suspect, not to incur the wrath of his political opponents and appease his Social Democratic NDC Party as IMF packages come with stringent fiscal behavior with some belt tightening. President Mahama believes we need somewhat a ‘program advice’ from the IMF in order for us to achieve ‘policy credibility’. But how? There is just too much program advice from within Ghana. We need money from the IMF. The only issue is that we will not get so much as we did under Kufour and rightly so, since we are in such deep abyss that we shouldn’t be encouraged to splurge. Besides IMF money may not be disbursed until at least four to nine months. It therefore seems to me that the government will still go for the Eurobond at expensive interest rates. In the mean time, it will be piling arrears on statutory payments and crude oil to generate power. The Atuabo gas MUST bear fruits this year else we risk further slippages.
Seth Tekper is the only man it seems to reign in government’s fiscal slippages and he must hang in there, although he must expedite action on the GIFMIS , something that looks like the single treasury account for government. Spending nearly $80m on an accounting idea when the accounting system is absent seems like a total,waste of time. There are cheaper computer programs that can do the trick assuming of course that every ministry is disciplined to account for all it gets in a year, and Government’s ability and willingness to meet individual ministry budgets. Can the Central Bank end all the very ugly forex rules, Please?
** Opportunity and Tasks
Yours Truly with two other think tank leaders will meet with the IMF team in Washington to make significant inputs into Ghana’s bail out package. We hope they take our concerns on board.
Gratitude: my thanks go to the good Lord for his boundless mercies, my open society foundation hosts and Oxfam America for the thought, my folks at Atlas and Heritage for the great discussions, my good friend Martin Ocran for the hospitality and to you my compatriots for wishing me traveling mercies. See you soon. Have a great weekend. Eat something like RED Red and plantain and wear red too.
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