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Friday, April 3, 2015

Dr. Bawumia and the NPP Brand

Nana Akuffo Addo's running mate, Dr. Bawumia
Successful business corporations have brands whose worth sometimes exceeds their actual market value. The Apple electronic brand stands for freshness and creativity. Volvo evokes a sense of safety in consumers. What does the New Patriotic Party (NPP) brand evoke in you? 

Strong political parties have unique brands rooted partly in their founding history. To unpack the founding history, it is important to know who the founders were, what they did for a living, and what major event(s) triggered the party’s formation. It is also useful to understand the founders’ development philosophy. In this regard, the NPP has a unique brand imbued with meaning that helps differentiate it from others in the “political market place.” Party brands, if managed well, yield dividends in what pundits call “political equity,” which pays off at the polling booths. 

The NPP brand appeals to people of all socio-economic persuasions, but particularly to a unique crop of youthful middle class. Bright Simons, an entrepreneur and social commentator, labels them the Aspirational Class, instead, describing them as “having a mix of entrepreneurial pursuits with the hunt for professional pedigree.” They tend to consist of professionals, intellectuals and businessmen and women from both white and blue-collar professions. A shining example is the Broadcast Journalist, Kojo Oppong Nkrumah, who is set to contest the NPP parliamentary primaries in the Ofoase-Ayirebi constituency of the Eastern Region. This does not mean that the party alienates the underclass. What it means is that, unlike its archrival, the party neither glorifies nor preys on electorates’ material poverty to perpetuate itself in power. It is in this context that the political equity Dr. Bawumia, an Economist and NPP’s Vice Presidential Candidate, brings to the table is best appreciated.

In light of this, the NPP rolls out smart economic and social policies that facilitate the upper mobility of the poor. An excellent example is Ex-President Kuffour’seight-year tenure. Inspired by the Danquah-Busia-Dombo tradition, Kuffour’s robust policies grew the economy, and put Ghana on the lower middle-income trajectory for the first time in the country’s history. He achieved this feat partly by slashing in half the proportion of Ghanaians living in extreme poverty and hunger, a feat that earned him the prestigious World Food Prize award in 2011. 

In spite of his government’s shortcomings, Kuffour managed to reinforce and consolidate the party brand. His government’s strategy came to demonstrate what is possible when competent politicians and technically skilled elite force work intelligently with the private sector for the common good. By growing the economy, expanding the middle class and shrinking the underclass, Kuffour put a positive spin on the party brand, helping to appreciate its value. 

Today, Dr. Bawumia is well positioned to play a crucial role in marketing the party brand, especially to the aspirational youth. To put it in a “dumsonian” language, he is increasingly becoming light to everything dark in President Mahama’s handling of the stunting economy. He is well educated, intelligent, analytically rigorous, and above all, gracious. 

His well-acclaimed public lectures employ evidence-based technical analysis in diagnosing the fundamental ills of the economy. For example, he predicted the infamous currency depreciation last year before it finally hit. By mid 2014, the Ghana Cedi became the worst performing currency in the world, behind conflict-prone Ukraine. In March of the same year, he also foresaw and warned government to clean up the fiscal space or risk bailout from the International Monetary Fund (IMF). True to his words, President Mahama recently succumbed to a bail out loan of almost one billion dollars from the IMF. These lectures are not only elevating the standards of public discourse, but are most importantly revolutionizing the approach to policy formulation and implementation. This is a healthy development, given how new crop of militant government communicators have seized the airwaves and effectively diluted important public discourses to propagate parochial agendas. 

The former Bank of Ghana Deputy Governor has transformed himself into the new poster child of the NPP brand. His value to the party derives not from seeking to transform its nature or character. That foundation has already been laid decades ago, thanks to the likes of Professor Adu Boahen, Dr. Abrefa Busia, and Dr. Joseph Boakye Danquah. Dr. Bawumia is valuable because he has become the major identifiable figure in our time that is actively re-aligning the party to its root, steeped in intellectual rigor, under the firm leadership of Akuffo-Addo. He is not reinventing the plot; he is retelling the party’s story to a new generation. 

Despite his obvious pluses, Dr. Bawumia has come under barrage of attacks by his opponents as being inexperienced—a political neophyte. It is true that Ghanaians do not yet know how effective the Economist would prove himself as an active politician. What everybody, including his opponents know, however, is the man’s solid grasp of economic fundamentals of the country. Besides, does political experience in itself leads to good governance outcomes or actually impedes them? 

Some pundits are of the view that having political experience actually tends to kill idealism by forcing candidates to conform to the often-toxic status quo. To quote H. Kwasi Prempeh, a Law Professor, “political experience gives [candidates] close familiarity with the tricks and loopholes in the system.” 

In a way, the President of Ghana, John Mahama, vindicates the law Professor. As the most politically experienced and prepared president in the history of the nation, Mahama is also perceived by many as the worst performer, at least in the Fourth Republic. 

A PhD student at Northwestern University, Kofi Asante, also weighed in using the United States President, Barrack Obama, as an example. According to him, the "...appeal that Obama had was that he was a fresh face, in a sense, a non-establishment guy, he was not steeped in the bad old ways of partisanship, of big money, the lobbies etc.”

As running mate to the influential Akuffo-Addo, it is easy to see the transformational power that their collective leadership would unleash on the nation. This is the political equity that Dr. Bawumia brings to the party. He is helping to establish a significant and differentiated presence of the NPP in the political marketplace, thereby retaining loyal party base and attracting new supporters.

When you visualize the NPP brand in 2015 under the current leadership duo, what do you see? Many see smart policies, middle class growth, and economic transformation. Needless to say, Dr. Bawumia’s contribution to this branding can hardly be overemphasized.

Friday, January 3, 2014

Introduce Rationality into Traditional African Thought

Post by Kwame E Bidi.

I will start this post by invoking Stephen Hawkings, arguably the most celebrated scientist in modern times. In his critically acclaimed book, The Grand Design, which he co-authored with Leonard Mlodinow, he stated unapologetically thus, "...philosophy is dead." His reason is that "traditional philosophy has not kept up with modern developments in science, particularly physics. He continued, "Scientists have become the bearers of the torch of discovery in our quest for knowledge." 
Almost all Ghanaian and African philosophers can be classified as traditional philosophers in a sense. Their scholarship forms the mainstream narrative on African philosophical thought. They helped in various ways to clarify the African traditional conception of the universe by distilling from centuries-old mythologies, taboos, oral stories, songs and symbols to provide a near-unified theme on African thought and beliefs. While this endeavor is commendable, it is also problematic. 
Most of these thinkers got stuck in the mainstream conventional narrative and almost never moved on from there. There was hardly any identifiable crop of alternative thinkers who undertook rational distillation of the mythical narratives enshrined in African philosophy in light of contemporary knowledge (enabled largely by advancement in science and technology). Thus, concepts such as "spirit child" or Abiku, oracle, ghost, or ancestral worship with its attendant rituals, still remain unchallenged in any way. This gap, in my view, explains why Africa's 21st century still mimics European medieval eras, in its uncanny reception to everything otherworldly and supernatural, even among our respected scientists. 
One social commentator, Bright Simons gave a disturbing account of a prominent Ghanaian astrophysicist who attempted to explain an eclipse in spiritual and biblical terms on national TV. In another instance, Dr. Gadzekpo, the Director of Ghana Institute of Languages, engaged the services of spiritualists to help ward off suspected ghosts at the institute's premises with taxpayers' money in 2012. In an interview he granted to Citi News, he said,
We have been having very serious nocturnal strange happenings at the Institute of late. It’s becoming very alarming... I am talking about ghosts and evil spirits who have been coming, banging doors and struggling over doors with the security guards and at times strangling them...”
Curiously, these outdated worldviews by the two personalities still remain unchallenged by any modern-day thinker. The silence of the public seems to betray the uncomfortable reality that these views are actually mainstream and not fringe ones. 
Allied to the above, the rise of African consciousness in the post-colonial era centered for the most part on identity politics and occurred predominantly as a tacit backlash against the hegemonic Western scholarship, which effectively attempted to undermine the authenticity of African philosophy as a serious academic endeavor. Justifiably, African writers and thinkers turned to the continent's mythic past to recreate an authentic and distinct philosophy in the modern age, and in the process birthed what I call an anachronistic philosophy, which for the most part bears no practical relevance to the modern world. 
The scientific era brought in its wake a system of thought that explained the world in realistic terms away from the dark and overly superstitious past where ghosts, spirit children, witchcraft and many such other unfounded beliefs resided. In many parts of Africa and other poor areas of the Global South, these beliefs are still potent in ways that affect everyday lives of people and stunts their material and scientific development. 
There is a need to critically re-examine traditional African philosophy in light of today's knowledge. Rationality should be forced into the narrative. The goal will be to render African philosophy relevant to the practical realities of the modern world. Perhaps the traditional philosophers have laid down a foundation; it is time to build on it.

Friday, June 28, 2013

Our Culture vs. the Law: Ups and Downs

This article is prompted by the Supreme Court’s handling of the thorny issue of contempt outside of court, technically referred to as “ex facie curie,” in the ongoing presidential petition. I begin on the simple premise that what enhances our progress as a nation in one sphere stifles our progress in other spheres.
Specifically, our unique cultural virtue of forgiveness and tolerance make us a peaceful people…but at what cost? “Could there possibly be a down side to a good virtue that is exercised with the best of intentions?” you might ask almost absent-mindedly. My answer is yes. I will explain, but first, let me mention that I will use President Mahama and Mr. Awuku to represent different power hierarchies in the Ghanaian political system. I do not intend to invoke partisan sentiments to please or displease any particular faction. 
The Supreme Court, led by Judge William Atuguba, issued three unambiguous warnings to the public on three separate occasions against making contemptuous remarks.  According to the court, contemptuous statements, by their deceitful nature, tend to mislead and inflame passions of unsuspecting members of society, and could ultimately lead to chaos and conflict. Needless to say, these warnings came from the highest court of the Republic of Ghana adjudicating over a uniquely sensitive case with no precedent of its nature and importance. Ordinarily, you would expect political leaders to hold their followers in check against making unguarded comments while the case is still being decided in court. However, the situation on ground has proven to be the polar opposite, leaving respectable members of society baffled. The troubling situation is that it is not only the “young and inexperienced” NPP Deputy Communication’s Director, Samuel Awuku, who is guilty of breaching the court orders; the President himself, John Dramani Mahama, may as well be guilty.
At the 20th anniversary ceremony of a gathering in the Eastern Region, the President made a controversially contemptuous public statement to the effect that his presidency is God-ordained. This is coming at the time that his legitimacy as the president of Ghana is being decidedly challenged in court. His message may sound harmless on the surface, but it carries grave implications for a) national peace and security and b) the integrity of the Supreme Court. His message provides a moral justification for his over-zealous supporters to cause a “Jihad” sort of mayhem in the event that the court ruling does not go in favor of his administration. This is a classic indirect ex facie curie, but the Supreme Court did not consider it contemptuous enough or chose to ignore it, despite issuing a number of warnings just weeks ago.
Constitutionally, we know the president cannot be cited for contempt by any court. Ace Ankomah, the legal pundit, commenting on this post on my Facebook timeline, stated, “Citing the President for contempt will unleash a major constitutional crisis. He cannot be the subject of any civil, criminal or quasi-criminal proceedings whilst in office.” But he was quick to add, “…his continued breach of the law could be a ground for impeachment.”
Finally, the Supreme Court found a perfect scapegoat—a young and ambitious Samuel Awuku—who allegedly described one of the court's punitive measures as “hypocritical and selective.” The Atuguba-led judges appear to have had enough; the rod of justice must strike. However, what unfolded next may surprise the rest of the world, but not Ghanaians. It will effectively launch us into the primary import of this article.
The judges took more than one hour out of court proceedings to deliberate and decide on what to do with this individual. Yes, one hour of Supreme Court’s time! Psychologists have long noted that certain kinds of punishment actually reinforce undesirable behaviors, instead of curbing them. In this case, giving the culprit an unprecedented attention on national television is a powerful negative reinforcer, especially if the punishment is not deterrent enough. Eventually, the court decided to temper justice with mercy, as the respondents and petitioners both pleaded on his behalf, in line with the Ghanaian culture of forgiveness and tolerance. He later issued an apology. In Justice Atuguba’s ruling on the case, he stated,
“We have considered the candid admission of Mr. Sammy Awuku’s utterances…in reaction to the final warning of the Court with regard to improper reportage and the previous warnings of this court concerning contemptuous comments, utterance and attitudes towards this apex court of Ghana, issued just on the 24th day of June 2013. He has apologised and withdrawn the same before this Court and has further undertaken to repeat the retraction by 6pm today.”
Mr. Awuku’s only punishment for willingly flouting the rules of the court was exclusion from court proceedings for the duration of the case. The judges exercised a prime Ghanaian cultural virtue of forgiveness and tolerance. Is this not a good and humane gesture? I do not necessarily think so.
The tendency to forgive, even after three warnings by the highest court of the land, is partly what makes Ghana a uniquely peaceful country in Africa—but also notoriously lawless. Principles do not run deep enough, and laws are not applied consistently across board. This same reason explains why corruption is deeply entrenched in society—one can break the law with impunity, but find ways and means to evade punishment, especially if they are a “somebody”…but what happens to the “nobodies”?
If the Supreme Court needed only an apology, after three forewarnings on-camera, in order to allow the sword of justice to strike on a willful contemnor, I do not see how that sends a good signal to ordinary Ghanaians to uphold the law off-camera. In my view, if the President himself had been reprimanded publicly by the Court for his problematic declaration in the first place, Mr. Awuku would have been reasonably deterred. By applying what seems to be selective justice, the court was somehow obliged to pardon Mr. Awuku in order to avoid a possible public backlash from the opposition faction.
Our culture of forgiveness is great and has caused our peace as a nation to be abundant, but the opportunity cost is that our principles are shallow, our application of justice is selective, and this creates the right conditions for corruption to thrive. What enhances our progress in one sphere stifles our progress in other spheres, but how do we deal with this apparent paradox? Perhaps it is time our well-placed intellectuals paid scholarly attention to some of our subtle little devils.

Sunday, February 17, 2013

The Problem of Superstition in Ghana

Our country has more than its fair share of active believers. What it lacks are active thinkers and problem solvers.
A dangerous trend is beginning to take root in Ghana. It is the practice of doom prophecy, targeting the elites and the powerful. Where it came from? Same place where Internet fraud aka Sakawa and Okada originated: Nigeria.  The practice survives in very superstitious societies where people would rather believe anything than think one thing.
We’re getting ahead of ourselves; let’s take a U-turn and situate the issue in context. 
The year was 2007, and Akosombo dam, Ghana’s main source of electric power, was receding past the minimum threshold, but the government didn’t have a backup plan to the rescue. The president assured staff of Volta River Authority (VRA) that “God will not allow the dam to hang”, implicitly implying that the power problem was indeed spiritual. Not surprisingly, the message was well received by Ghanaians. Many pastors and their followers took to Akosombo, prayed and shed tears for several days. Apparently, the tears were not enough to fill the dam—perhaps the entire nation was needed to pull off the trick. Today, the power situation is worse but we didn’t pause to ask what became of those productive hours spent praying for some miracle rain. 
Then again, the Kotoka International Airport was suffering from years of mismanagement and corruption. Shutdown was imminent. The management of the airport thought the best way to use taxpayers’ money was to fly a certain man of God from abroad to pray for the company.  It was hoped that a miracle would follow. It didn’t. The problem persisted. 
To many Ghanaians anything that is inexplicable must be spiritual. Our locus of control is dangerously external. “What do you mean Akua’s headache hasn’t gone since yesterday? Have you called the doc doct…I mean the pastor?” Thinking and problem solving can’t help spiritual matters, can they? Forget the school and focus on the church. Any wonder that our places of worship are ultra modern while our schools are ultra jungle? Or that our chapels outnumber our educational units and hospitals?
The media, the local movie industry and most churches try to make us believe that problems of underdevelopment and poverty are all machinations of some devil and his earthly agents. Witches and wizards are the easy targets. However, do most Ghanaians actually know that other countries escaped poverty and other problems associated with developing countries NOT by spiritually binding their own witches and wizards, but through thinking and problem solving? Isn’t it true that it was breakthrough in science and technology—agriculture and industrial revolutions—that actually freed the European witches and wizards from their camps? 

This pattern of thought is deeply entrenched in the Ghanaian psyche and has survived because it has evaded questioning and critical analysis. We’re feeding children with this absurd dose of superstition, and without the benefit of travel, which often challenges such a worldview by confronting it with alternative ones, our nation is fast becoming a haven for miracle-seeking zombie-like people.
Now back to the main story. This year, God has chosen to reveal to Rev. Dr. Owusu Bempah, founder of Glorious Word Power Ministries International, that the sitting president is going to die. According to him, intercessional prayers are required to reverse this calamity. Many religious leaders, including Bempah’s trainer, Archbishop Duncan-Williams, have expressed divided opinion on the prophecy. Many have brushed it aside as an attention-seeking stunt, while others, including the Rev Eastwood Anaba, have braced themselves up for prayers. 
Pause briefly to examine the nature of the prophecy. It’s such that it’s impossible to be proven wrong. What can’t be proven wrong is always right. What is always right is practically useless. Why? Because it adds nothing to our body of knowledge. Thus, if by coincidence the president dies this year, just like 100s of Ghanaians would, the prophet is vindicated. If he doesn’t die, it was so because God listened to the prayers. Again, Bempah is vindicated. 
Remember the former President, Attah Mills? The reverend apparently foretold his death, and again, laid down intercessionary prayer as conditionality for his survival. Really? First, the former president was already down with cancer, which only a few survive anyway. He died. Had he survived past 2012, he’d have done so only because God heard the prayers and decided to intervene. Sensed the absurdity?
I posit that Bempah’s prophecy itself is a lifeless pronouncement unless the president and Ghanaians decide to animate it by believing in it. This is how it works. Once we collectively believe it, we succumb our will to it, endowing it with the power to shape our reality. If our faith in it becomes complete, it overgrows our reality, saps away its life, and eventually becomes indistinguishable from it. What becomes of the president ultimately then, is nothing more than the sum of our individual and collective realities, which in this case is the product of our misplaced belief. Essentially, we’d have succeeded in creating our own reality to mirror Bempah’s prophecy. It is analogous to a dream, which is but a vivid projection of our own subconscious thoughts and aspirations, although it is an entirely false reality. 
Here’s a scenario to underscore the point. The president complains of a minor headache weeks after Bempah’s pronouncement. Before the prophecy, he would’ve have brushed it off or taken an over-the-counter pain killer. The following day, he’s back to work at the Jubilee house fit and sound. With this prophecy however, things are going to be different. Family members and friends will start to panic. He’d receive numerous calls asking about his health. He becomes overly conscious of the headache and gives it extra attention than it deserves. He starts to think the headache may have something to do with the prophecy. He begins to succumb to fear, his blood pressure rises, and he becomes sleepless and agitated. Sleeplessness weakens his immune system, giving way to other diseases. He’s rushed to the hospital, but the doctor finds nothing wrong with him organically. This makes him and his family even more nervous. “Bempah must be right”, they whisper to each other.  Next, the president is rushed to spiritual healers for prayers and rituals. 
Well, if he regains his health in the process by placebo effect, the prophecy has come to pass. If he dies, the prophecy has been fulfilled. In both cases, the reverend’s power and influence would have soared, reaffirming superstitious beliefs. The next Sunday, Ghanaians flood his chapel for prayers and miracles. He makes plenty money and becomes rich and powerful overnight.  “God blesses his obedient servants with riches and wealth”, he tells his congregation. In fact, his life becomes very “tasty” like “aluguntugui.” Funny, huh?
Belief works like a parasitic organism. It has no material substance, form nor shape, but it is potent with incredible capabilities. Its power lies in its ability to sap life from the living brain, neutralize its critical thinking ability, and then subsume it. Once the process is complete, the brain becomes an empty shell that houses and protects its new host. Younger brains are particularly susceptible to this phenomenon. Ever wondered why the Taliban prefers young boys and girls for its suicide missions? 
A society like ours that feeds on what I term “unproductive beliefs” such as unfounded superstition regresses while societies that feed on productive beliefs progress. Productive belief is a refined and evolved one that has survived “thinking” in the form of questioning and doubting. Believing in the power of the human intellect, for instance, is an example of a productive belief because it leads to discoveries and inventions that improve life. Unproductive beliefs are unrefined: they are pampered and “saved” from thinking. “Just believe…you’re asking too much questions. Where is your faith”, they say. In fact, critical thinking poisons and kills unproductive beliefs in the same way that freedom kills communism. They survive in the minds of people who would rather believe anything told them than think one thing for themselves.
The human specie has evolved greatly over the millennia through an ongoing series of complex adaptions. Each successive adaption was a victory for our survival. Perhaps superstition had a survival value for our ancestors in pre-modern societies. Today, however, progress in science has rendered its value useless. Many people no longer think of drought or epidemics as punishments from some loving deity. Child prodigies aren’t witches or wizards with some “spiritual” capabilities. Rain doesn’t stop to fall into the Akosombo dam because a deity has spiritually withheld it. 
Isn’t it time we applied thinking and problem solving to our numerous challenges using the latent power of our incredible brains? Manna no longer falls from the heavens, it is cultivated right here on earth using available human and material resources.
Mr. President, I entreat you to undertake an impossible task: Neither die nor survive 2013 to vindicate Reverend Bempah. Just vanish, melt or something…just anything apart from dying or living. 

Sunday, March 4, 2012

Should Ghana Sign the $3 billion Loan with China?

Investment thrives on risk, doesn’t it? The higher the risk, the higher the returns. However, the return can go in either direction --a big win or a big loss. Ghanaians like to frame it slightly differently and for a good reason – a gargantuan win or loss. It is the task of the wise investor to carefully assess their risks, both obvious and hidden, subject them to rigorous quantitative and qualitative analyses before taking a decision. This is especially critical when the investment is being made with the taxpayers' money.
The government of Ghana is about to make a very big loan deal with the Chinese government. The protracted loan has generated a lot of controversy in Ghana starting from 2011. It involves Ghana taking a $3 billion loan and paying back with 13,000 barrels of oil daily for the next 15.5 years. It’s called “trade-by-barter” and its underlying principle is simple: use what you have to get what you need. China has a healthy load of cash, much of which has to be invested outside of its economy to ensure macro-economic stability. Ghana has oil and needs capital to bring its infrastructure to a point that maximizes gains from the product. So, the two countries have decided to help each other out through trade. It's that simple. The complication, however, comes from the fairness of terms of the agreement.
Going by the current price of crude oil ($107/barrel), the government will have to pay back 7.9 billion to the Chinese government by the duration of the contract. Thus, interest on the loan alone is almost 5 billion -- about 1 billion short of double the actual loan amount. Excellent return on investment for the Chinese government! But what about Ghana?
Two renowned professors hold diametrically opposed views on the loan. The US-based Ghanaian Professor of Economics at American University and President of Free Africa Foundation, George Ayittey, who came up with the initial figures, is of the opinion that the deal is bad for Ghana. The Professor-President of Ghana, John Evans Attah Mills, however, believes the deal is good for the nation and is bent on pushing it through. Professor Mills completed his doctoral thesis in the area of taxation and economic development and is obviously not a newcomer to quantitative analysis. So why are the two professors at odds with each other on the Chinese loan? And by the way, Daily Guide reported on February 29 that government of Ghana’s lawmakers have already voted in favor of the loan agreement.
Does the deal make an investment sense to you from the figures above? Should the government go ahead and take this level of risk with taxpayers' money? Before you jump to a hasty conclusion and risk breaking a leg or two, pause and reflect for a few minutes. Well, as it turns out, the answer is not that simple when the assumptions behind the figures are laid bare. The decision even becomes slightly...well, call it "nightmarish" when the raw numbers are toasted in the microwave of econometric analysis. Did I say toast in a microwave?
First, the figures presented earlier assume that the current price of crude oil ($107/barrel) will stay constant over the 15.5 years of the contract’s life. Second, it does not control for future rate of inflation. Third, the computation fails to factor in future discount rate over the contract period. Bright Simons, the Director of Research at an Accra-based think-tank, was quick to add one more factor which almost eluded me initially: the figures assumed a zero rate of depreciation for the Ghanaian currency (Cedi) over 15.5 years. At this stage, I guess you're beginning to appreciate why the deal has "occupied" the Ghanaian airways for over a year.
The Ghana government’s financial analysts surely did price projection for crude oil over the 15.5-year period, taking into account historic prices of crude oil as well as interest and inflation rates. They might have also analyzed potential national and global events that could affect the future price of crude oil. Examples are the financial health of major trade partners in Europe, the US and Asia; global economic growth projections (because it affects demand for energy), and market analysis for alternative energy sources. Perhaps, they also controlled for the future of conflict-ridden oil producing nations such as Nigeria (thanks to Boko Haram) and Iraq.
In fact, government officials are more optimistic about the loan than most critics could imagine. The Chief Executive officer of Ghana National Gas Company (GNGC), Dr. Adjah-Sipa Yankey, is reported by Reuters as saying the $700 million gas project which the loan will finance will be able to pay off the $3 billion loan after five years. "Once we start operations, in between four-and-a-half to 5 years we will generate enough money to pay of[f] the entire loan and start making profits", Dr. Yankey said to to Reuters in 2011.
And, yes, critics of the loan, including Professor Ayittey, and many opposition party members, have done their own analyses, too. The opposition Member of Parliament (MP) for Manhyia, Dr. Mathew Opoku Prempeh, is reported as saying the nation stands to lose $2.325 billion from the loan agreement. He continued, "… [The] negotiated agreement makes mockery of the people of Ghana, and…smells of corruption..." Another opposition Member of Parliament is quoted by AllAfrica.com as saying the contract "...breached the Petroleum Revenue Management Act 815 of 2011, section 18(7) which precludes collateralization of the nation's oil for a period not more than ten (10) years.” It is important to point out that a major rival financial institution, the International Monetary Fund (IMF), is also opposed to the loan deal.
On their recent posts, Professor Ayittey and Kofi Korsah further clarified the terms of the loan agreement. According to Ayittey, the infrastructure projects, which the loan is meant to develop under the Ghana Shared Growth and Development Agenda (GSGDA), will be built with Chinese construction workers, not Ghanaian workers. This is happening at a period when the unemployment rate is hovering around 11% (2000 est). He labeled the deal as a "chopstick mercantilism with a human face.” Kofi Korsah, a London-based Ghanaian, mentioned that per terms of the contract, the loan will be disbursed not in bulk but in tranches over a five-year period, which further goes in favor of China.
It is important to keep in mind that the Chinese government is in business to make money, obviously. The Chinese financial analysts likely did their own financial analysis and made projections before crafting the terms and conditions of the loan. Should their assumptions hold, they hope to make a good profit from the deal. A profit for China could mean a loss for Ghana and vice versa. However, for a small economy like Ghana, with no benefit of scale, unlike that of China, even a slight loss could have far-reaching consequences. It is nonetheless possible that the deal would be mutually beneficial, although China still stands a better chance, given the present terms of the agreement -- at least from a layman’s perspective.
The onus lies on the government of Ghana to double-check its facts and assumptions (both explicit and implicit) before signing the contract, as it has far-reaching ramifications for the nation's nascent economy. Another option is for the government to push for re-negotiation of aspects of the loan to make it fairer for both parties. Given the information above, should the government of Ghana commit the nation to the $3 billion loan agreement with China or not? Which of the professors’ views do you side with? Is the answer still as simple as it seemed from the beginning?