After Senchi: Simple ways to alleviate the people’s suffering

Matthew Kainyah Opinion Jul - 03 - 2014 , 16:15

Between May 12 and 15 2014, a number of participants, drawn from practically every sector of Ghanaian society met at Senchi in the Eastern Region to discuss the economy.

As the organisers put it, the objective of the forum was to “build a national consensus for economic and social transformation in pursuit of sustainable development.”

The forum left in its wake the debate as to whether it achieved any objective. For many, though, the first thing Senchi did not achieve was the “consensus”:

The NPP boycotted it! The history of the Senchi Forum is well-known. Over the past year or so, the Mahama-led government has been mercilessly flogged over its handling of the economy.

Of course, there are many charlatans and doomsday apostles in Ghana today who see nothing good that this government has done (or will probably ever do)!

But the truth is that times are hard. The President has admitted it himself on a number of occasions, although he promises that things will get better soon.

Even for the Ghanaian worker who receive salaries at the end of every month, it is not easy to make ends meet, so one wonders how the jobless survive.

Ghana, it must be said, is a developing country, so to expect its citizens to live as comfortably as people living in a first world economy is being a bit too expectant.

However, if we cannot have an economy that provides all our needs, at least it must be one that mitigates the suffering of the people.

Corruption

The resolutions made at Senchi gives an indication that we still do not appreciate the basic things that create hardship for the people.

The remote cause of our poverty is corruption in the body politic. Corruption engenders dissipation of national resources and outright theft from the national treasury.

It is a major reason for the permanent shortfall in national revenues, resulting in a lack of funds that has made us dependent on foreign aid.

Corruption has created a clique people who are constantly stealing from state coffers. Together, these individuals are richer than even the state itself.

They have hijacked the state’s resources, leaving the government with no money to fund critical programmes in education, health and infrastructure.

Until resources meant for development is stopped from being diverted into private pockets, Ghana will never be able to satisfy the needs of the vast majority of its people and poverty levels will continue to rise.

Enforcement lapses -rent

Another reason people cannot live a decent life is that the government has failed over the years to assert its authority and enforce basic laws.

One nightmare for the Ghanaian worker is what is known in local parlance as “rent advance”. This is the demand of years of rent in advance by landlords.

Rent advance eats into tenants’ savings and urban dwellers with no property of their own have to cough out millions of cedis to pay their rent in advance.

This practice has compelled many Ghanaians to source for loans that eventually place them in a cycle of poverty and has even made many families homeless.

What is amazing is that although there is a law in Ghana that outlaws the practice, it is neither enforced by the government nor invoked by tenants against landlords.

The government has to ensure that this practice is completely stamped out to save many Ghanaians living in urban communities from the squalor they find themselves.

Pricing mechanism

Another peculiar phenomenon that exacerbates economic hardship in Ghana is the absence of any regulation guiding the pricing of basic commodities and services.

Under military dictatorship, the authorities used a mechanism known as “controlled price” to keep down the prices of basic commodities.

This mechanism was despised by retailers who complained that it stifled their profits and condemned by analysts who argued that it encouraged hoarding.

Unfortunately, the indiscriminate increase of prices by retailers these days makes one long for a price regulatory measure – even if it is not necessarily the military method.

In many French-speaking African countries, prices of basic goods are uniform because they are sold at a supermarket in the city or in a corner shop in the village.

In Ghana, a commodity costs what the seller says it costs! So expect to pay more for the same quantity of the same product, just because of who you are buying it from!

Retail sector

The problem is, there are no rules as to who is eligible to retail goods, where is appropriate for these goods to be sold and what profit margins are acceptable or allowed.

Many traders in Ghana operate without any control. They buy their goods from other retailed sources and then put another profit margin on previously retailed prices.

This “composite retailing” ultimately pushes up prices to exorbitant levels, creating hardship, especially for buyers who live far from city centres and rural areas.

Ghanaian traders relish unbridled freedom to maximise profit at every opportunity and turn round to blame government policy for their own profiteering.

In 2001, traders at Abossey-Okai decided to reduce the prices of vehicle parts as a sign of “goodwill” towards the them Kufour-led NPP government.

The traders had decided to raise the prices of goods as a sign of protest against the NDC government and readily reduced the prices once it was voted out of power!

This means that traders can collude to set prices that suit them and buyers have no choice of a lower price so they are compelled to buy at that high price!

At this very moment, retailers are increasing the price of cement at will, even though GHACEM has instituted a specific retailer’s price and has not increased its producer price!

Solutions

Such conduct does not help the image of the government because as far as buyers are concerned, the price hikes have to do with government insensitivity – not the retailer!

The government must find innovative ways to control prices since this laissez-faire policy that was instituted to encourage competition and bring down prices is not working in the people’s interest!

To regulate prices without creating shortages, the government could set price ceilings for basic commodities that factors in the retailer’s overhead expenses and a “reasonable” profit.

These prices can then be made public through the media or be posted onto a dedicated consumer website created by the Ministry of Trade and Industry for reference.

Buyers could have such information at the back of their minds so that they can guard against being ripped off by unscrupulous retailers.

This measure can also guide government outfits during procurement by helping them determine whether suppliers are quoting reasonable prices for goods and services.

There are other things this country can do to turn the economy around and become self-sustaining without having to rely on outside help.

The cornerstone policy is what is often quoted in the axiom that we need “to produce what we consume and consume what we produce”. That is the key.

In the meantime, however, we can put in place such “commonsense” measures as have been suggested above to alleviate the poverty that afflicts the vast majority of Ghanaians.

And we need to do this fast before the people are instigated by the current economic hardship to protest against the government in one form or another.

Writer’s email: kainyahmatthew@yahoo.com