ECONOMIC MANAGEMENT AND CORRUPTION IN GHANA
Without strong watchdog institutions,
impunity becomes the very foundation upon which systems of corruption are
built. And if impunity is not demolished, all efforts to bring an end to
corruption are in vain — Rigoberta Menchú, Nobel
Prize laureate.
Economic management and
corruption are key determinants of the development of countries around the
world. The developed countries are
highly advanced because of the effective management of their economies and
corruption-related issues. Developing countries on the other hand, continue to grapple
with economic management and corruption.
Economic management is the
management of the resources, finances, income and expenditure of a community,
business enterprise and so forth.[1]
In the case of Ghana, the issue of economic management has been a very crucial
one in the country’s political space and one of the major determinants of the
outcome of the 2016 elections. The New Patriotic Party (NPP) which was the
major opposition party at the time criticised the ruling National Democratic Congress
(NDC) for the mismanagement of the country’s economy which in their view had brought
untold hardship to many people in Ghana. The NDC was also constantly criticised
for excessive borrowing.
In recent times, the Standard
and Poor Global Rating has put Ghana’s credit rating to B which implies the
country’s economic outlook is stable.[2]
This appears to be good news for the Ghana’s economy. However, during the
reading of the 2020 midyear budget review, the Finance Minister revealed to
Parliament that Ghana’s public debt stock had hit about GH¢255,727.1 million
(US$ 45,486.1 million) by the end of June 2020.[3]
The figure jumped to GH¢263.1 billion in July 2020, representing about 68.3
percent of the country’s GDP.[4]
In October 2020, the International Monetary Fund (IMF) forecast a worrying 76.7%
of debt-to-GDP ratio for Ghana in 2020. This put Ghana in the high risk of debt
distress category.[5]
The foregoing implies that the ruling NPP government has also not fared too
well with the management of the economy since the country is now in more debt
than it was four years ago. The government has however defended its actions,
citing the banking crisis and Covid-19 as some of the reasons that necessitated
its action to borrow more. It is worth noting, however, that Ghana’s total
public debt stock was GH¢204.6 billion as at January 2020.[6]
Both the World Bank and IMF had prior to Covid-19 expressed worry about the
country’s rising debt levels, which poses challenges to its fiscal economy.[7]
The World Bank defines
corruption as the abuse of public office for private gain. [8]
Public office is abused for private gains when an official accepts, solicits,
or extorts a bribe. It is also abused
when private agents actively offer bribes to circumvent public policies and
process for competitive advantage and profit. Corruption is endemic in developing
countries and this has stifled development in many parts of the world. One of
the major setbacks of development in Africa is largely attributed to the lack
of political will of governments and leaders to curb this canker. Ghana’s
economy has suffered a great deal because of certain acts of corruption by
ruling governments. In August 2019, Ghana Integrity Initiative revealed that
the country loses close to US$3 billion to corruption annually.[9]
The issue of corruption is constantly included in the manifestos of political
parties during election campaigns. However, little is done to combat corruption
when these parties are eventually elected into office.
Ghana’s current position
on the corruption perception index released by Transparency International in
January 2020 is 41 out of 100, a sharp decline from 47 in 2015.[10]
Ghana recorded its worst performance with an average score of 40 out of 100.
The figure rose marginally to 41 in 2018 and maintained that figure in 2019.[11]
This implies that Ghana is failing woefully in the combat of corruption. It is
exigent that all citizens remain committed to fighting corruption in all its
forms in their various dealings and places of work. Political parties must also
have the political will to battle corruption when they are in power and not
just talk about it only when they are in opposition. Ghana needs strong and
robust institutions as well as people with integrity to fight corruption to enhance
an effective management of the economy.
Economic management and
corruption are issues which countries, especially developing countries such as
Ghana, need to deal with decisively. It serves a country no purpose to have
good managers of its economy who are also corrupt. Leaders must not amass
wealth to enrich themselves and their families to the detriment of the ordinary
Ghanaian and future generations. It is submitted that the lives of many Ghanaians
would be greatly transformed if the US$3 billion, which is lost through
corruption annually, is injected into the economy to promote national
development. The reduction of corruption would also go a long way to reduce the
habit of constant borrowing from the IMF, World Bank and other institutions. Tackling
the issue of corruption head on is one of the best ways any government can
manage Ghana’s economy. One of the effective ways to do this is to build strong
national institutions and nip impunity in the bud. No more lip services towards
the fight against corruption in Ghana. Let us walk the talk!
Richard Obeng Mensah, author of If You Think of Your Opposition You Lose Your Position .The writer is an award-winning author of 7 books and over 250 articles. He is also a certified life and leadership coach, a lawyer, a legal academic and a blogger. Blog: www.richard-obeng-mensah.blogspot.com Email: richardobengmensah@gmail.com © 3 November 2020.
[1]
‘Economic management’ <https://www.collinsdictionary.com/dictionary/english/economic-management/>
accessed October 30, 2020
[2]
‘S&P Global Rating lowers Ghana’s Long-term Rating to B- with a Stable
Outlook (2020) Ministry of Finance
<https://mofep.gov.gh/press-release/2020-09-14/global-ratings-lowers-ghanas-long-term-rating-to-b-with-a-stable-outlook/>
Accessed October 30, 2020
[3]
‘Ghana’s public debt stock now GHS 255 bn-Ofori-Atta’ (2020) GhanaW263bn in
July 2020 >https://mobile.ghanaweb.com/GhanaHomePage/business/Ghana-s-public-debt-stock-now-GH-255bn-Ofori-Atta-1014967<
Accessed 2 November 2020
[4]
Charles Nixon Yeboah, ‘Ghana’s debt jumped 1.66% to hit GH¢263bn in July 2020’ <https://www.myjoyonline.com/business/ghanas-debt-jumped-1-66-hit-ghs263bn-in-july-2020>
Accessed 3 November 2020.
[5]
Charles Nixon Yeboah, ‘Ghana’s debt-to-GDP ratio to hit 76.7% in 2020-IMF’ <https://www.myjoyonline.com/business/ghanas-debt-to-gdp-ratio-to-hit-76-7-in-2020-imf/>
Accessed 3 November 2020.
[6]
Charles Nixon Yeboah (n 4).
[7]
Ibid
[8]‘Corruption
and Economic Development’ The World Bank Group
<http://www1.worldbank.org/publicsector/anticorrupt/corruptn/cor02.htm>
accessed October 30, 2020
[9] Zdravko Ljubas, ‘Ghana loses US$3 Billion to
corruption a year’ (2019)
<https://www.occrp.org/en/daily/10498-ghana-loses-us-3-billion-to-corruption-a-year/>
accessed October 30, 2020
[10]
‘Ghana Maintains score on Corruption Perception Index’ (2020) ARAP
< http://www.arapghana.eu/news/ghana-maintains-score-on-corruption-perception-index/>
accessed October 30, 2020
[11]
Ibid
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