By Yirenkyi Lamptey
On March 6, 2018, Ghana marked 61 years of political independence with a students’, workers’ and security services’ March Past at the Black Star Square in Accra. And the highlight of the statement by President Nana Addo Dankwa Akufo-Addo is the proposal that it is time for Ghana to wean itself off foreign financial aid.
While others have explained that it is about time Ghana did that and even praised the president for articulating it, others say it is mere political talk and an old one at that, since other leaders of Ghana have ever hence articulated it, yet nothing has come of it in half a century. While both sides are right, the real issues lie in between them.
The real issues lie in between, because persistently being on foreign aid has terrible disadvantages that over-ride the advantages and so, as the president says, it is necessary for Ghana to wean itself off it. Yet, truly, he is not the first leader of Ghana to have articulated it, which would suggest at least two basic possibilities why the problem persists. One, a past leader(s) may have tried to deal with the issues responsible for us being on foreign aid and have failed. Or two, a leader may have looked at the challenges he has to deal with to achieve the desired objective and thought this is too much task and decided not to tackle it at all; leaders who focus solely on electoral gains do this.
Hence the real issues we need to focus on and should be discussing lie in-between the two – the fact of the consistency of past leaders in articulating it as a challenge to our progress and the fact that it is a step we need to take if we want to be in charge of our destiny (as a state and as a continent).
The President’s Basics
Yes, Kwame Nkrumah articulated it in his inaugural speech on March 6, 1957. Ghana now had political independence and Nkrumah said inter alia: “…[This] new African is ready to fight his own battles and show that after all the black man is capable of managing his own affairs.” “Affairs” is the social, political and the economic, and the economic is the foundation of the other two. Thus to be able to manage your own affairs is to be economically (including financially) independent, and then you can have control over your destiny, i.e., your politics, social and economic.
Speaking on Joy FM’s current-affairs-discussion programme, Newsfile, last Saturday, the MP for Bawku Central, Mahama Ayariga, said even military leaders, Gen. I. K. Acheampong and J.J. Rawlings, also articulated that position somewhat when they complained of how foreign aid enslaves Ghana.
From several of his statement delivered over the last year, Nana Akufo-Addo is clearly worried about Ghana’s financial dependence on so-called developed countries who every year support our annual budget, sometimes up to more than fifty per cent. Earlier this year, when he addressed African leaders at the AU Conference at Addis Ababa, Ethiopia, Nana Akufo-Addo explained that when another country gives you money to fund your education and that country’s policy changes, you will also have to change, most likely in ways that are not in your interest. Thus for Nana Akufo-Addo to state, in principle, that same point in holistic manner is pointer to his personal conviction that it is not strategic for Ghana to be on foreign financial aid.
He compared the before and after of Ghana and her peers in the areas of getting independence around the same period and having similar Gross Domestic Product (GDP) or how much money the economy is able to internally generate. Some of those countries are Malaysia and Singapore. Today those countries have GDPs that make a midget of Ghana’s GDP. (Ti-Kelenekelen has misgivings on GDP really measuring a country’s economic strength, yet as a factor it gives us an index of comparison.) The point is that with the higher GDPs those states have, to a large extent, reduced their dependence on foreign financial aid.
On what we can do to wean Ghana off foreign financial aid, Nana Akufo-Addo listed at least two. One of them is fighting and reducing corruption and directing the recouped cash into funding the state’s annual budget. And since most of the same amount of money (or more) is stolen year after year by the same disingenuous schemes, closing a loophole will yield the same amount of cash year after year in future. And the president mentioned how the tediousness of the Auditor-General, Daniel Y. Domelevo, has identified and saved Ghana GHC5.4 billion (over US$1 billion) in false claims on the Consolidated Fund.
The other way is value-addition, and the president articulated that by taking us, his audience, through how much value is added to raw bauxite through the four stages of production to the obtaining of alumina – four times of the price of the raw material, bauxite, at the next stage; ten times the amount after the third stage and forty times when one finally has alumina. If the factory is here we can ensure most of the profits stay here. By Onyame’s design, Ghana has very large bauxite deposits and then we have the almost abandoned VALCO alumina smelting plant in Tema Industrial Estate. The president mentioned these, but said we need to expand the plant; which by itself portends certain conceptual challenges.
The Historical Challenges
One of the obvious challenges to weaning ourselves off foreign financial aid is the result of the actions of the very people who give us the financial aid. In How Europe Under-developed Africa, black philosopher from Guyana in the Caribbean, Walter Rodney, explains very aptly that Europe has built its modern prosperity on (and, and, by working for) the poverty of Africa. Still today, the West still builds its prosperity on the poverty of Africa. And weaning ourselves off foreign financial aid means ending that endemic poverty of Africa on which the West’s prosperity subsists; they will fight back. Ironically and almost humorously, therefore, the foreign financial aid from Western countries to Africa is part of the means they use to ensure Africa remains in poverty. The concept is simple but has far-reaching consequences – when someone pays (part of or all) your (living) bills (for you), you tend towards laziness and you could end up not doing anything for yourself; you slip into poverty and dependency.
And Kwame Nkrumah had a taste of what Western countries and their companies do to try to keep us in poverty when he wanted us to build the Akosombo Dam and Hydroelectric Project. As Ghana Information Services documentaries show, the World Bank, which is a tool of those very Western countries, said it will give Ghana the loan for the project only if there is a big project that comes with it; their argument is that it will help Ghana pay the loan faster. And so the US company, Kaiser, agreed to come and build the aluminium smelting industry, VALCO, here. But Kaiser offered to pay next to nothing for a kilowatt of electricity and one would have thought the World Bank, wanting its money to be paid back faster, will be interested in asking Kaiser to pay more. It simply means when you do business with a Western state, you are on your own.