News Column

No Time for Jokers! Mahama's U.S.$156 Million Loan for Pads Insults Our Intellects

July 8, 2014

"Yesterday, striking student nurses went on a route march on the streets of Accra. One of their marching songs was: "We don't want pads. We want our allowances."

On Republic Day, Tuesday, July 1, 2014, President John Dramani Mahama held a luncheon for senior citizens at the State Banquet Hall in Accra. It is an exercise the Head of State of the Republic has been doing for some time now, as a form of expressing the appreciation of the state to our senior citizens for their services to this nation, in their working period. It is a very thoughtful exercise, for which our retired former workers have always been grateful.

In the course of wining and dancing, the President had a few thoughts on his mind, and he minced no words about them. The Head of State of the Republic told his audience that he would not only continue to listen to the good people of this country, he would also work with the people to fashion out a better country.

PROMISE "I made a promise to work in partnership with you, the citizens of this country. I have not forgotten that one of the greatest virtues of leadership is the ability to listen," the Head of State said.

Since then, no one has explained to the people of this country why the President had to talk about his oath at this point in time in the life of this country. From my point of view, the Presidential assertion was a direct rebuttal of some mischief someone planted on the social media circus that President Mahama had announced his resignation, overwhelmed by the magnitude of the task at Government House.

In the words of the Head of State, the luncheon was in recognition of the senior citizens who were the heroes of the history of the Republic, "the ones whose labour and values, whose dreams and demands shaped the destiny of the people, and for this alone, we owe them a debt of gratitude."

He told his audience that as leader of this society, he would continue to work hard to find ways and means of overcoming the challenges of state. "I want all of our children to feel entitled to the habit of asking for more, and confident in the knowledge that it can be attained," President Mahama said.

At the time he made the pronouncement, he knew that his government had failed to honour statutory commitments, in the form of social interventionist policies that had been carefully nurtured to promote the welfare of all Ghanaians, particularly children, the future leaders of society. The Government owes the 175 Metropolitan, Municipal and District Assemblies nearly one year subscription of the Common Fund. It has not honoured commitments to the Ghana Education Trust Fund (GETFund) for about three quarters either.

How this administration, headed by President Mahama, expects to bring relief to the hard-up Ghanaian is one of the riddles of running a government on promises that would not be fulfilled. The administration, he is heading, is being weighed down by the quantum of public debt, as a result of reckless borrowing and misuse of the money.

The stock of public debt, according to the Bank of Ghana, stood at GH¢55.6 billion, up from GH¢51.6 billion in December 2013. "Of the total public sector debt, domestic debts constitute 48.5 percent, and external debt was 51 percent." This nation is not sitting pretty at all. That is why, in my opinion, the Presidential assertion of providing all that children of this nation need may ring hollow in the ears of the discerning public.

It is the sign of the time that, instead of arguing out the merits and otherwise of the drifting economy and its falling cedi, as outlined by eminent economist Dr. Mammudu Bawumia in his lecture on the campus of the Central University at Prampram, the former running mate of Nana Addo Dankwa Akufo-Addo, in the 2012 presidential election, was pilloried by communication officers of this moribund administration and party apparatchiks.

Since then, a number of institutions, including the International Monetary Fund, have voiced out the same concerns. Last month, the Standard Chartered Bank, in a statement on Ghana's economy, predicted further financial distress for this country, citing chiefly, the debt burden.

"In 2013, debt service repayments were at GH¢2.4 billion, approximately 40 percent higher than budgeted. Domestic interest payments were approximately 47.2 percent higher than budgeted targets. Domestic interest payment grew 140 percent in 2013, reflecting higher levels of borrowing in 2012, and the accumulation of a larger debt stock. Given the extent of overturns in debt service payments, confidence is rapidly receding."

Standard Chartered stated that pressure was likely to build further in 2014, with debts service costs becoming more problematic. "Given its worsening debt profile, Ghana's revenue generating efforts will receive less investor attention. This is unfortunate, as the rise in Ghana's revenue-to-GDP ratio, since the 2010 re-basing, has been impressive. Revenue collection was an estimated 18 percent of GDP in 2013, up from only 13 percent in 2009. But, spending increased much faster, clouding the improvement."

The Standard Chartered Bank's statement virtually endorses the view of Dr. Bawumia that the high rate of borrowing in the last five years of NDC rule, during which public debt increased by an astronomical 426 percent, "had begun to choke the economy, as interest rate payments has taken up to 40 percent of total government revenue."

The international banking institution also rubbished the foreign exchange regulation mechanism announced by the Bank of Ghana to deal with foreign exchange constraints in the country. "Measures to deal with foreign exchange market pressure have not worked, and have done little to restore confidence in the cedi," the Standard Chartered Bank stated. The cedi is not sitting pretty at all, and that is official. On Friday, the HFC Bank issued what amounted to a disclaimer on the confidence level in the cedi's ability to stabilise. The cedi, it warned, was at risk of weakening as much as another 19 percent before the end of the year.

The currency could reach the GH¢3.50 very soon, falling further to four to the dollar, according to Mr. Benjamin Dzoboku, Head of Treasury at the bank. Already, the decline in the value of the cedi is causing serious dislocation in the economy, as importers struggle with paying much higher for goods already ordered. The price of every available commodity in this country is rising. The price of sachet water went up by over 25 percent yesterday.

On the streets and joints throughout the country, sachet, which sold at 15 pesewas, was adjusted to 20 pesewas. There is no respite for the Ghanaian from escalating prices - from rent to school fees. According to the HFC, the slide in the currency is spurring the price of every commodity to rise at the Centre of the Earth, making budgeting ahead of purchases, a monumental struggle.

PRESSURE "Demand for dollars for importation," states Mr. Dzoboku, "is still high, and that is the main pressure on the cedi. The government's own demand for dollars for projects and to settle debts is also high." It is for this reason that most Ghanaians are livid with the government of President John Dramani Mahama for telling Ghanaians that it is borrowing more money for such a trivial issue as providing sanitary pads for school girls, especially, when their teachers are reporting of lack of basic teaching aids like chalk, exercise books, and reading books.

Yesterday, striking student nurses went on a route march on the streets of Accra. One of their marching songs was: "We don't want pads. We want our allowances." With the debt profile threatening to overwhelm the governance process, President John Dramani Mahama cannot joke with the destiny of this nation and its population. The President would have to revisit his oath of office, and spare all of us the huge joke of borrowing US$156 million to buy sanitary pads. This society is in no mood to entertain jokers.

I shall return!


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Source: AllAfrica


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