Dr Joe Abbey, a renowned economist and the Executive Director of the Centre for Economic Policy Analysis (CEPA), on Wednesday noted that the current political terrain in Ghana is scaring off foreign investors, making them feel insecure about the future of their investments.
He said the uncertainties that characterised the financial indiscipline in the last 18 months of an election year and the huge government spending often led to inflation and the fall in the purchasing power of the cedi against the dollar and other foreign trading currencies.
Dr Abbey, who was proving a point as the Chairman of the Institute for Democratic Governance’s (IDEG) third reflection seminar on Political Transitions in Accra on Wednesday said the situation led to high cost of doing business.
He said investors are worried and needed assurances that their businesses would be insulated from the challenges of economic mismanagement that often characterised an election year.
Dr Abbey suggested that the Bank of Ghana (BoG) should come up with a package that would give investors assurance of stability of the national economy.
He also urged the BoG to place measures in place to cut down on undue government spending to prevent inflation and lower the cost of doing business without disruption.
The seminar which was under the topic: “Economic Management during Political Transitions: Perspective of Former Finance Ministers,” was part of efforts by IDEG to enhance Ghana’s democratic governance process and provided a platform for past Government Officials who served in the Ministry of Finance and Economic Planning (MoFEP) to share their experiences, from which the nation could draw lessons to improve upon future transition processes.
It was attended by participants from the Ministries, Departments and Agencies , traditional institutions, development partners, the academia, private sector, civil society organisations (CSO’s) and the media.
Dr Abbey said it was clear from the country’s recent history that institutional vacuum that was characteristic of Ghana’s transition politics had had negative effects on the management of the economy.
He indicated that in almost every election year the incumbent government had indulged in excessive or inflationary spending and generally managed the economy in accordance with what it regarded to be politically rational.
He stressed that the political management of the economy becomes worse during transition elections when an incumbent government was likely to be voted out.
Dr Abbey said during such periods the fiscal accounts of the State are managed without prudence and with less transparency.
He said such poor economic management during an election year and particularly during transition elections had resulted in considerable economic instability, distortions, policy constraints and the loss of investor confidence in the immediate post election years.
He said Ghana could not boast of a credible transition devoid of personal hatred and vengeance between the victor and the vanquished.
Dr Abbey advocated the strengthening of the Civil Service to make it more efficient and responsible to handle the transitional process of the country.
Although he commended the call for the passage of the Transition Bill which would set the guidelines for the process, he noted that it would not be a panacea for a peaceful process unless the personalities involved changes their negative attitudes towards each other”.
Dr Abbey stressed that it was important that Ghanaians became modest in their undue pressure on governments to increase their spending as the consequences could be detrimental to the socio-economic status of both the people and the development of the country.
According to him a World Bank study had already revealed that government on an election year spends about one and a half per cent higher of than its national income on political arrangements, which leads to further weakening of the economy.
He called for a swift action and advocacy by CSO’s to correct the challenge and further hold politicians accountable for their vague promises that often lead to untold pressure and fulfillment by the public.
Dr Anthony Akoto Osei, a former Minister of State at the MoFEP in the New Patriotic Party (NPP) Administration from 2004 to 2008, said his party did not inherit any precedent in political transition and therefore had to struggle to find its own way through.
He admitted that that the challenges faced during transitional period had nothing to do with politics but was a typical negative Ghanaian cultural attitude that needed to change in order to achieve peace and order in the country’s democratic process.
Dr Osei pointed out that the absence of a transitional system gave room for political vengeance, mistrust and exhibition of sudden hatred even among old friends.
He supported the strengthening of the Civil Service to handle the transition in order to prevent the confrontations and tensions that often ensued between a winning party and the vanquished during the transition process and bring about peace, continuity and sustained development.